A NGO or Non Profit Organisation is an entity that operates for promotion of art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. In India, an NGO can be registered as any of the three structures being Company under Section 8 of the Companies Act, 2013(section 25, companies act 1956), Trust or Society.
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What is a Section 8 Company?
In India, a non – profit organization often known as NGO can be registered as a Company under Section 8 of the Companies Act, 2013 (erstwhile Section 25 of the Companies Act, 1956) and can also be registered as Trust and as a Society registered under the provisions of Society Registration Act, 1860. Section 8 Company form of a NGO is most popular form of NGO in India. It is easy to register, run or manage a Section 8 Company in comparison of a Trust and a Society.
According to Section 8(1a, 1b, 1c) of the Companies Act, 2013, a Section 8 company can be established for ‘promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object’, provided it ‘intends to apply its profits, if any, or other income in promoting its objects’ and ‘intends to prohibit the payment of any dividend to its members.
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Numerous Tax exemptions are provided to Section 8 Companies, specifically to the donors who are contributing to Section 8 Companies, they can claim the Tax exemption against the donation they made to a Section 8 company.
A Section 8 Company has more credibility as compared to any other Non-profit organization structure be it a Trust or Society. As it is a licensed by the central government. It has more stringent regulations such as no change in MOA and AOA can be done at any stage or situation in a Section 8 Company.
Object must be Charitable or to promote arts, science, commerce etc.Intends to apply all its profit in promoting the objectives and Assures the prohibiting of the payment of dividends to any of its members
Forming section 8 company at least one of the director should be residential in the company.
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Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with a bank to open your bank account.
What are the requirements to be a director?
Any person above 18 years can become a director. Non-residents can also become director of Indian companies.
What are the documents required for registration?
ID proof and residence proof of all the proposed directors, PAN card is mandatory for Indian nationals. No objection certificate from the owner of registered office or lease agreement must be produced.
What is a digital signature certificate (DSC)?
Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.
For incorporation of Section 8 Company, do I have to be present in person?
The entire procedure is 100% online and you don’t have to be present at our office or any other office for incorporation. A scanned copy of documents has to uploaded on document vault and our experts will carry out all registration formalities for you.
I wish to start my NGO. The objective is to impart quality education and upliftment of unprivileged children. Should i form a trust, society or register as a section 8 company?
In India, NGOs can be registered as Section 8 Company, trust or society. While, Trusts and Societies are registered under State Government regulations, section 8 companies are registered under Ministry of Corporate Affairs.
Forming a section 8 company is prefered due to following reasons: Improved recognition Better legal standing. Higher credibility amongst donors, Government departments and other stakeholders. Relaxation from a number of companies act regulations
Is Digital Signature mandatory for carrying out registration formalities?
Digital Signature is the only secure and authentic way that a document can be submitted electronically. All filings of e-forms on MCA Portal are required to be filed with the use of Digital Signatures by the person authorised to sign the documents.
Under the plan you can obtain 2 class II digital signatures along with E-token, having a validity of 2 years.
In case, you already have a DSC, our experts will offer you some concession accordingly on the above package
How many directors can be appointed?
A private limited company must have a minimum of 2 directors while the maximum no. of directors can be upto 15.
What are the requirements with regard to the company’s name?
Company’s proposed name should be unique i.e., it should not be identical to any existing name. Names that infringe others’ rights, trademarks or patents are likely to be rejected by ROC
What is Director Identification Number (DIN)?
DIN is a unique identification number which is allotted to all the directors existing or proposed. DIN can be obtained by filing e-form DIN1 in MCA portal.
Who can become a member in Section 8 Company?
Any individual/organization can become the member of Section 8 Company including foreigners/NRI’s.