Procedure for Incorporation of Section 8 Company

A Section 8 Company is registered as a limited company under section 8 of Companies Act, 2013. It holds the licence from Central Government.The main purpose of establishing a section 8 company is to promote non-profit objectives. In case of incorporation as a public limited company there should be minimum three directors. And two directors in case of incorporation as a Private Limited Company. In procedure for incorporation of Section 8 company various forms are to filed with MCA.

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The main purpose of a Section 8 company is to promote non-profit objectives such as:

  • Trade,
  • Commerce,
  • Arts,
  • Charity,
  • Education,
  • Religion,
  • Environment protection,
  • Social welfare,
  • Sports,
  • Research, etc. 
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Procedure for Incorporation of Section 8 Company

To register a company under Section 8 you need to just follow these steps:

  1. Obtain a DSC of the proposed Directors of the Section 8 Company.

    Obtain DSC of at least one director to sign the E-forms related to incorporation.

  2. Once a DSC is received. File Form DIR-3 with the ROC for getting a DIN.

    For DIN application you will require Identity Proof and Address Proof

  3. Once the DIR-3 is approved.

    ROC will allot a DIN to the proposed directors.

  4. Draft MOA and AOA

    It should be noted that the main objects should match with the objects shown in RUN Form

  5. File Form RUN for reservation/availability of company name.

    Applicants can access the free name search facility of existing companies available on the MCA portal

  6. After approval, file Form INC-12 with the ROC

    For application of licence for the Section 8 company.

  7. Once the Form is approved by Central Government, a license under section 8 will be issued in Form INC-16.

    The Registrar shall have power to include in the license such other conditions as may be deemed necessary by him

  8. After obtaining the license, file SPICE Form 32 with the ROC for incorporation

    Along with the required attachments.

FAQs

What is the maximum number of members in case of limited company?

The maximum number of members in case of a private limited company can be 200. Further for a public limited company, there is no such limit.

What are the documents to be attached with Form INC-12?

The documents to be enclose with the application include:
a. Draft of MOA as per Form INC-13
b. Draft AOA
c. Declaration as per Form INC-14 (Declaration from Practicing Chartered Accountant)
d. Declaration as per Form INC-15 (Declaration from each person making application )
e. An estimate of future annual Income & Expenditure for next 3 years. Specifying the sources of the income and the objects of the expenditure.
Every subscriber shall sign the subscription pages of the MOA and AOA of the company. Along with his name, address, and occupation. This shall be in the presence of at least one witness who shall attest the signature and sign and add his name, address, and occupation.

What are the documents to be attached with SPICE Form 32?

Following are the documents to be attached with SPICE Form 32:
1. E- MOA and E -AOA.
2. INC-9 Affidavit and declaration by all subscribers and directors.
3. Declaration of deposits.
4. KYC of all Directors
5. Form DIR-2 along with a copy of the PAN Card and address proof of the directors.
6. Consent letter of all the directors.
7. Interest in other entities of the directors.
8. Copy of Utility bills (Not Older than 2 months).
9. NOC from the owner of the property if the premise is on lease/rent.

Section 8 Company : Forms required for Incorporation

The main purpose of establishing a section 8 company is to promote non-profit objectives. Therefore, it intends to apply its profits, if any, or other income in promoting its objects. Therefore there should be no distribution of dividends to its shareholders. Thus, section 8 company has to file various incorporation forms. Further, NPO/company has its objective of promotion of:

  • Arts,
  • Commerce,
  • Charity,
  • Education,
  • Protection of the environment,
  • Science,
  • Social welfare, ect.
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Section 8 Company : Incorporation Forms

Here is a list of Section 8 Company Incorporation Forms:

Name of Forms Purpose of Forms
RUN Application with ROC for Name Approval
INC-7 Application for Incorporation of Company
INC-8 Declaration to apply for PAN and TAN
INC-9 An affidavit from each director and subscriber
INC-12 Application for Issue of License of Section 8 Company
INC-13 Memorandum of Association
INC-14 Declaration from a Practicing CA or CS
INC-15 Declaration by each subscriber
INC-16 License to operate as Section 8 Company
INC-22 Notice of the location of the Registered Office
DIR-2 Consent of Directors
DIR-3 Application to ROC to obtain DIN
DIR-12 Appointment of Directors

 

Form RUN

Form RUN is filed for the reservation of the name of the proposed company. Furthermore, applicants can access the free name search facility available on the MCA portal before quoting the name in the form.  Moreover, the Registrar may on the basis of information and documents filed as an application, reserve the name for a period of 20 days from the date of the application.

Form INC-12

Form INC-12 is filed for obtaining the license to operate as a Section 8 company. Along with this form for, applicants are required to attach following documents:

  • Draft MOA as per Form INC-13
  • Draft AOA
  • Declaration as per Form INC-14 (Declaration from Practicing Chartered Accountant)
  • Declaration as per Form INC-15 (Declaration from each person making application)
  • Estimated Income & Expenditure for next 3 years.
  • List of Promoters and directors of company.

In addition, subscription pages of the MOA and AOA shall be signed by each subscriber. Along with their name, address, description, and occupation, in the presence of at least one witness

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Section 8 Company Incorporation Form INC-7

The e-form INC-7 deals with the incorporation of the new company. However, the name of the proposed company should also be reserved with MCA before initiating the filing of INC-7. The following information and documents are to be attached along with INC-7:

  • Memorandum and articles of the company duly signed by all the subscribers.
  • An affidavit from each of the subscribers and first directors in Form -INC 9. Stating that they are not guilty of any offense or misfeasance.
  • Declaration in Form INC 8 that all the requirements of the Companies Act have complied.
  • Form INC 22 for proof of registered office address (Rental agreement, sale deed etc.).
  • Address and Identity proofs of all the subscribers to MOA and first directors of the company.

FAQs

Who is authorized to issue license to Section 8 Companies?

Registrars of Companies of respective jurisdictions are authorized to issue licenses to Section 8 Companies. Furthermore, they have been delegated with the powers of the Central Government to issue a license to Section 8 Companies.

Can a Company with unlimited liabilities be registered as
a Section 8 Company?

No. Rule 20(1) of the Companies (Incorporation) Rules, 2014 states that only a limited company registered under this Act or under any previous company law shall make an application to the Registrar for the issue of license. Therefore, a company with unlimited liabilities cannot be registered as a Section 8 Company.

Can Section 8 companies receive donations?

Yes, Section 8 Company can receive donations. These companies are a form of a non-profit organization. Therefore they can avail of several tax exemptions. Especially the donors who contribute to such companies. Hence, under Section 80G of the Income Tax Act, 1961, the donors can claim the tax benefit against the donation they have made to the company.

What is Form DIR-3 KYC on MCA?

KYC means Know Your Customer or Know Your Client. The Ministry of Corporate Affairs i.e. MCA introduced Form DIR-3 KYC to update the data of every existing director in its records on an annual basis. Thus, each director with a valid DIN and designated partner with a valid DPIN must file this form on a mandatory basis.

When is the Due Date to file Form DIR-3 KYC?

  • Financial Year 2018-19: 15/09/2018
  • Financial Year 2019-20 onwards: Every director who has been allotted DIN on or before the end of the financial year, and whose DIN status is ‘Approved’ is required to file Form DIR-3 KYC on MCA Portal on or before 30th April of the next financial year.
Due Date DIR-3 KYC
On or before 30th April of next financial year
Due Date DIR-3 KYC
On or before 30th April of next financial year

If the director or designated partner does not file Form DIR-3 KYC within the due date, MCA authority would mark the DIN or DPIN as ‘Deactivated’. Director can then file Form DIR-3 KYC on only on payment of fee of Rs. 5000.

What are the conditions for filing Form DIR-3 KYC?

Form DIR-3 KYC should be filed on MCA Portal in the following cases:

  • DIN or DPIN has been allotted on or before 31.03.2018
  • Status of the DIN or DPIN is ‘Approved’
  • Every director including disqualified directors must file Form DIR-3 KYC
  • Enter a unique mobile number and email address for every director. It would be verified by an OTP (One Time Password)
  • The director should sign the form using his DSC i.e. Digital Signature
  • A practising professional (CA/CMA/CS) should certify the form.
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What details are required to file Form DIR-3 KYC?

  • DIN i.e. Director Identification Number
    DPIN i.e. Designated Partner Identification Number
  • Name as per PAN database
  • Father’s Name as per PAN database
  • Date of Birth (DoB) as per the PAN database
  • PAN Number and Aadhaar Number if Citizen of India
  • Passport Number if not a Citizen of India
  • Personal Mobile number and Personal Email Address
  • Permanent residential address and Present residential address

FAQs

Do I need to file Form DIR-3 KYC if I am a Disqualified Director?

There are two conditions to file Form DIR-3 KYC:
a. MCA has allotted DIN / DPIN to the director
b. DIN / DPIN holds status as ‘Approved’
If both the above conditions are satisfied, even a disqualified director needs to file Form DIR-3 KYC

Which documents can I attach as address proofs to file Form DIR-3 KYC?

-Address proofs like passport, election (voter identity) card, ration card, driving license, electricity bill, telephone bill or aadhar can be attached
-Proof must be in the name of the applicant only
-Documents should not be older than 2 months in case of Indian applicant and 1 year in case of a foreign applicant

What happens if the eForm DIR-3 KYC is not filed within the due date specified?

The DIN holders who have not filed their DIR-3 KYC for FY 2018-19 yet, they can file it now, with a penalty of Rs 5,000 for reactivation of the DIN.

The original due date for filing of DIR-3 KYC for FY 2018-19 was 31 April 2019. MCA has extended the due date till 14th October 2019.

Process for Application of DIN/DPIN

Earlier, there was Form DIR-3 to make application for allotment of DIN (Director Identification Number) or DPIN (Designated Partner Identification Number). However, MCA (Ministry of Corporate Affairs) revised the rules for allotment of DIN / DPIN and incorporation of a company or LLP. Read about the process for the application of DIN or DPIN on MCA Portal.

As per the revised rules, here is a brief summary of the process for application of DIN or DPIN on MCA Portal:

Particulars Form Name Form Description
New Company SPICe Form for Incorporation of Company
New LLP Form FiLLiP Form for Incorporation of Limited Liability Partnership
Existing Company Form DIR-3 Application for allotment of DIN i.e. Director Identification Number before appointment in an existing company or LLP
Existing LLP Form DIR-3 Application for allotment of DIN i.e. Director Identification Number before appointment in an existing company or LLP

Notes:

  1. DPIN / DIN / DSC is not required to file an application for reservation of name under the RUN Service or RUN-LLP Service on MCA.
  2. A maximum of two designated partners can apply for an application for DPIN allotment under Form FiLLiP. However, there is no limit to the number of individual partners or body corporate partners.
  3. A maximum of seven subscribers can apply for application of DIN under Form SPICe.
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FAQs

What is the use of DIN?

DIN is a unique Director identification number allotted by the Central Government. DIN is allocated to any person intending to be a Director or an existing director of a company.

How much time does it take to get DIN?

DIN registration or getting DIN number takes about 2–3 working days.

Can a director be appointed without DIN?

As per section 152(3) of the Companies Act, 2013, No person shall be appointed as director of the Company unless he has allotted DIN under section 154 of the Act.