THE WAY PEOPLE CONSIDER ACCESSING ONLINE TAX & LEGAL SERVICES IS BEING CHANGED BY US.
A company licensed under section 8 of the companies act, 2013 for promotion of research, social work, etc. is called a section 8 company.
Section 25 Company (under Companies Act, 1956) is a prior version. Section 8 Companies are a legal form of “Non-Profit Organizations (NPOs) or Non-Governmental organizations (NGOs)”. A Section 8 Company has the authority to work anywhere in the country.
The process and necessities of a Section 8 Company are actually equivalent to a limited company. Including all the rights and commitments that accompany such a limited company. The main viewpoint where they differ is that a Section 8 Company can’t utilize the words “Section 8” or “Limited” in it’s name.
The process of registering a Section 8 Company is same as incorporating an “NGO, Trust, or a Co-operative Society” under the Companies Act 2013.
An extra necessity must be fulfilled for obtaining a license from the central government under Section 8 of the Companies Act, 2013.
The license, basically, allows them to delete Private/Public Limited from their name. With this permit, the company becomes eligible for the specific exclusions from provisions of law and has concessions in the charge.
If the proposed Section 8 Company has been enrolled as a private limited than at least 2 directors are required. But if it is a “public limited Section 8 Company” then a minimum of 3 directors must be there.
Copy of PAN Card
Aadhaar Card
Address Proof (Bank Statement, Electricity Bill, Telephone Bill)
2 Passport Sized Photographs
Ownership Proof (House Tax etc.)
Utility Bill (Electricity Bill, Gas Bill)
Address Proof (Bank Statement, Electricity Bill, Telephone Bill)
Being an NPO or Non-profit Organization does not imply that the Company can’t make a benefit or income. It just implies that the Company can earn benefits however the promoters are not to profit from those benefits. The benefits can’t be disseminated among the promoters. All incomes must be applied to advancing the objective of the company.
Still, certain exclusions and advantages have been accommodated to an “NGO or an NPO” under section 8 of the Companies Act 2013. The donors contributing towards a Section 8 Company are eligible to confirm the Tax Exemption against these gifts.
Distinct Legal Identity: A Section 8 Company is a separate legal entity and is different from it’s members. It’s legal standing is not the same as it’s individuals. The Company has a never-ending presence, alongside having organized operations and greater adaptability.
Zero Stamp Duty: A Section 8 Company is excluded from the necessity of paying stamp duty on both “MoA and AoA” of the private or public limited organization, which is relevant for enrollment of other sorts of company structures.
No Minimum Capital Requirement: No base capital limit has been referenced for a Section 8 Company in India. Also, the capital structure can be changed at any phase according to the growing necessities of the company. This suggests that it may be formed without any share capital. The funds necessary for carrying the business operations can be brought in the form of donations and/or subscriptions from members and the general public.
Name: A “Section 8 Company” does not need to add Limited or Private Limited, to it’s legal name. It may be enrolled with names like “Foundation, Association, Society, Council, Organization, Club, Charities, Academy, Institute, and Federation.”
CARO: Requirements of Companies Auditor’s Report Order or CARO do not apply to this type of company.
Tax Benefits: Many tax benefits are granted to Section 8 Companies in India.
Credibility: Section 8 Companies are more dependable than any other type of altruistic associations. They are represented by the Companies Act and are managed carefully. For example, the necessity of a required yearly review, or the “MOA and AOA” can’t be modified at any stage or circumstance.
Exemption to the donors: Those donating to a Section 8 Company are eligible for tax exemptions under section “12A and 80G” of the Income Tax Act.
Membership: An enlisted partnership firm can turn into a member in it’s individual capacity and acquire a Directorship.
Aggarwal Tax Solutions - Copyright 2024. All Rights Reserved.