A Private Company is a company started with minimum 2 members and which can be maximum to 200. A Private Limited Company enjoys various Legal rights as compared to any other form of Business Entity.
Q. What is Section-8 Company ?
A non-profit making company (NPO/NGO) termed as section 8 company as per companies act 2013,can be formed for promotion of any useful object like sports, education, research activities etc.
Q. Is it a Public Company or Private Company ?
We can register a section-8 company either as Public Company or Private Limited. Provisions of respected types company will be followed.
Q. What are the Significant provisions related to Section-8 Company ?
- These companies incorporated only for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
- Section-8 Company will not treat as Small Company.
- Section 8 Company shall enjoy all the privileges and be subject to all the obligations of Limited Liability Company.
- It is duty of Company to prove to Central Government that it will incorporate for above mentioned purpose only.
- The Central Government may issue license with such conditions as it deems fit and allow the registration of such person or association of persons as a limited company without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”.
- The power of the Central government is delegated to the Registrar of Companies having Jurisdiction over the area where the registered office of the company is proposed to be situated. Hence, the application for registering such company is to be made to the ROC.
- Many privileges and exemptions under Company Law.
- Exemption of Stamp duty for registration.
- Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act.
- These companies can be formed with or without share capital, in case they are formed without capital, the necessary funds for carrying the business are brought in form of donations , subscriptions from members and general public.
Q. What are the documents required of Section-8 Company ?
Here is the list of documents required for Section-8 Company:
For Directors and Promoters:
- PAN Card
- ID Proof (Anyone of Aadhar Card/ Voter Card/ Driving License and Passport)
- Address Proof (Anyone of Latest Bank Statement/ Electricity Bill/ Mobile Bill and Telephone Bill)
For Registered Office:
- In case the premises are Rented
- Rent agreement (Notarized)
- Latest Electricity bill
- NOC from the Owner in the name of any Director or Proposed Company
- In case the premises are Owned by any Director or any Relative
- Latest Electricity bill
- NOC from the Owner in the name of any Director or Proposed Company.
Q. How many members and director are needed to incorporate a Section-8 company?
Minimum two (2) members are needed to incorporate a Section-8 company. Those 2 members may be the proposed directors cum promoters of the company. (If we are incorporating it as Private Limited Company)
Minimum seven (7) members and three (3) Directors are needed to incorporate a Section-8 company. Three members out of total seven members may be the proposed directors cum promoters of the company. (If we are incorporating it as Public Limited Company)
Q. What is the procedure to incorporate a Section-8 Company?
Procedure to incorporate a private limited company as follows:
- Apply for DSC (Digital Signature Certificate)
- Apply for DIN (Director Identification Number)
- Apply for Name (SPICE+ PART-A)
- Apply for Incorporation of the company (SPICE+ PART-B)
- Get Certificate of Incorporation.
Q. How long does it take to incorporate a Section-8 company?
It takes around 8-10 days to incorporate a Section-8 company, if every documents, Name of company, and others are in order.
Q. Is it mandatory to keep the minimum capital as Rs. 1,00,000 or Rs. 5,00,000?
As per the companies Act, 2013 it was mandatory to keep the minimum paid-up capital to be Rs, 1,00,000/- or Rs. 5,00,000/-. But, as per the latest notification from the Ministry of Corporate Affairs, such minimum criteria have been removed. So, now there is no such compulsion to have the minimum capital to be Rs. 1,00,000/- or Rs. 5,00,000/-. Now, you may incorporate a Section-8 Company with any minimum capital you want.
Q. Do we need to deposit the capital of company somewhere?
Such Minimum Capital of the company needs to be deposited in the current account of the company within 2 months of incorporation of the company against the shares subscribed by the promoters.
Q. Can a NRI/Foreigner be the director/member of the Section-8 Company?
Yes, a NRI/Foreigner can be a director cum member in a Section-8 company but he/she needs to get all his/her documents appostiled from the Indian Embassy where he/she resides.
Q. Is it possible to incorporate a Section-8 Company with all the NRI/foreigner as its director cum members?
No, As per the companies Act, 2013 it is mandatory to have one resident Indian to be the director in the company with others NRI/Foreigners.
Q. How many persons can be the members of Section-8 Company?
Ans: As per Companies Act, 2013, there can be maximum 200 members in a Section-8 Company, if incorporated as Private Limited Company and there is no limit on members, if incorporated as Public Limited Company.
Q. Can we use the residence address as the registered office of the company?
Yes, there is no such restriction in the law to keep the resident address as the registered address of the company.
Q. Can we change Company Address after the incorporation?
Yes, we can change the Company Address within the local city according to our wish after anytime of company incorporation just by passing a resolution and filing of Form INC-22 with the ROC.
Q. Can we change the directors of the company?
Yes, there is no such restriction on changing the directors of the company. You may Add/Remove the directors from the company with their wish just by passing a resolution, preparing of some documents and filing of Form DIR-12 & DIR-11 with the ROC.
Q. Can we give documents related t0 registered office address after incorporation?
Yes, You may provide the registered office details within 30 days of incorporation, but one address as provisional address will be given at the time of icorporation which will be printed on the Certificate Of Incorporation.
Q. Will we receive Certificate Of Incorporation in hard?
No, Ministry Of Corporate Affairs issues the Certificate Of Incorporation in soft only. Now, there is no document which needs to send or receive in hard for incorporation of the company. The Ministry is following the initiative of Digital India where there is no need for hard documents.