A Section 8 Company, under the Companies Act, 2013 is referred to as a Section 25 Company under the Companies Act, 1956. This is a not-for-profit organization with an aim of promoting activities of art, science, literature, education, or research. Section 8 Companies usually have a focus on activities for public welfare or charitable purposes.

Unlike a normal company, a Section 8 Company cannot pay profits or distribute dividends to its members. The profits must be invested back to achieve its aims. Similar to a trust or society, but being a registered Section 8 Company, it is with the Central Government. However, a trust or a society is registered under State Government laws.

Key Features of a Section 8 Company

Non-Profit Nature: The revenue generated is strictly for charitable purposes; no dividend can be distributed to members.

Central Regulation: It is registered under Section 8 of the Companies Act, 2013, and is regulated by the Central Government.

Restrictions on Amalgamation: It can amalgamate only with another Section 8 Company having the same objectives.

Separate Legal Identity: It functions as a separate legal entity from its members.

No Minimum Capital Requirement: It has a flexible structure with no minimum capital requirement.

Advantages of Registering a Section 8 Company

Tax Exemption: A Section 8 company enjoys tax exemptions under Sections 12A and 80G of the Income Tax Act.

Higher Authenticity: Central Government rules have the element of more trustworthiness

Liability Limitation: Protects the personal wealth of its members and shareholders

Professional Management: Compulsory requirement of MOA and AOA ensures structured management.

How to Register a Section 8 Company Through Jsr Taxes Mentor

Registering a Section 8 Company with IAS Tax Zone is straightforward and time-consuming, and there are a few steps for it.

Step 1: Apply for Digital Signature Certificate

Digital signatures are a mandatory requirement for all directors and shareholders.

Step 2: Apply for Director Identification Number

Apply for DIN of all directors in compliance with the statutory requirement.

Step 3: Name Reservation and Incorporation

Submit an application to get the name approved via the RUN service (Reserve Unique Name).

File SPICe+ Form for incorporation, along with Memorandum and Articles of Association.

Step 4: Post-Incorporation Compliance

Obtain PAN, TAN, ESIC, and EPF registrations.

Open a bank account to start the business.

Documents Required for Section 8 Company Registration

All documents should be clear, signed, and scanned copies.

1. For Promoters and Shareholders:

Identity Proof: PAN card.

Address Proof: Aadhaar Card, Passport, or Voter ID.

Photograph: Recent passport-sized photo.

Bank Statement/Utility Bill: Latest statement (not older than two months).

2. For Registered Office Address:

Proof of Address: Recent utility bill, electricity, gas, telephone, or mobile bill.

Rent Agreement (if office is rented).

No Objection Certificate (NOC) from the property owner.

3. Further Information Needed

Occupation and Area of Occupation: Information regarding the applicant’s professional experience.

Educational Qualification: Highest qualification received.

Contact Information: Applicant’s email ID and mobile number.

4. Company Information:

Proposed name (suggest two options).

Authorized and paid-up capital.

Company’s main objectives.

% of shares to be issued to subscribers.

Police station address for the location of the registered office:.