A complete and full-fledged protocol guide of India regarding having a Private Limited company, Trademark and Section 8 Company

Coming up with a business in India can be very fruitful due to the continuous growth in the market opportunities in the country. However, the process of business: creation may be rather complicated or so it appears if one considers the legal aspects of business creation. To ease this process it is important to know some basics of Private Limited Company Registration and its difference from Trademark Registration and Section 8 Company Registration. In this blog, I will be discussing these topics, three process and how they can help your organization.

1. Private Limited Company in India – An Overview

Private limited company is one of the most common forms of business entities in India because it has its own limited liabilities, simple to manage, and has credibility among the businesses. Private limited company can be registered under the Companies Act, 2013 and the company has to register with the Ministry of Corporate affairs (MCA).

Benefits of a Private Ltd Company:

Limited Liability: In this structure of the business entity, the shareholders’ risk is limited to their investment which is the shares.

Separate Legal Entity: It is separate from its owners, can own property, make contracts, and sue or be sued.

Tax Benefits: They are an example of limited companies that are more preferable to start due to more tax benefits, higher chances of getting funding from investors or banks.

Better Credibility: The ability to operate your business as a limited company has its advantages as it increases the credibility of the business especially when engaging in 

business with clients, suppliers and investors.

Documents Required for Registration:

Digital Identity Certificate (DIC) for the proposed directors to generate a Digital Signature Certificate (DSC).

• Introducing Director Identification Number (DIN) for all directors.

• If the company is a limited company then the Articles of Association and Memorandum of Association.

• Certified taxpayers’ identification number thus spousal support, rental agreement or any document showing the office address.

• Of the directors, the PAN card and Aadhaar card.

• Two recent passport sized photographs of directors.

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Registration Process:

Obtain DSC and DIN: The first stage is to acquire the DSC and DIN of proposed directors for the corporate or business.

Name Reservation: Subsequently to registering the name, you are required to apply for the name reservation through the RUN (Reserve Unique Name) facility on the MCA portal.

Drafting MOA and AOA: These documents state the vision and mission statements, the policies and the procedures within the firm.

Filing with MCA: The last process is filing approval forms together with other related documents as and when required. When the MCA approves your application, your business is registered, and you become ready to start operation.

Trademark may be defined as a special graphic, non-verbally expressed sign, pattern, emblem, or word that sets apart your products or services from that of other producers. In India, laws relating to trademarks have been governed by the Trademark Act, 1999 which offers legal aid to the businesses and government to protect their brands ownership.

Why Trademark Registration is Important:

Legal Protection: Trademark registration gives the proprietor rights to use it thus preventing other people or company from using it.

Brand Value: It assists to establish an identity of the company and or products or services and hence helps the consumers to easily identify with them.

Global Reach: This allows for the international registration through Madrid protocol to protect ones mark when one is looking to expand business.

Process of Trademark Registration:

Trademark Search: Make sure that you do a trademark search to check on your trademark of preference and see whether it has been used by someone else.

Filing the Application: After selection of a unique mark you should make application to the Controller General of Patents, Designs, and Trademarks in India.

Examination: The application is then analyzed to check on compliance with the law and the regulations that have been put down.

Advertisement in the Trademark Journal: After successful completion of the examination, the trademark is advertised in Trademark Journal.

Opposition Period: In case there is no opposition made to the trademark within six or four months, the registration is deemed to have been done.

Registration Certificate: When the application is accorded a registration number, you will be issued with a trademark registration certificate.

Indian trademark registration can also be applied online following the various procedures in the official IP India website.

3. About Section 8 Company Registration in India

A Section 8 Company is a company formed under the Companies Act, 2013 having objects of promoting commerce, art, science, sports, education, research, social welfare, religion, charity or any such other Utilitarian purpose. The most distinguishing characteristic of Section 8 company is that the profit arising out of the company's business is not distributable among members but utilized for the promotion of the objects of the company.

Key Features of a Section 8 Company:

Non-profit Organization: The company can not declare dividends to members, directors or shareholders.

Legal Entity: Like any other organization, section 8 company is a legal entity and offers limited legal liability to their members.

Promoting Social Good: The main goal of this company is to help organizations that are related to societal issues and therefore it is suitable for organizations like NGOs, charitable organizations and social business organizations.

Tax Exemption: Section 8 companies are also eligible to register themselves to receive donations under section 80G of Income Tax Act.

Eligibility for Section 8 Company Registration:

• The company should have a purpose of furthering arts, commerce, science, education, religion, charity or the promotion of social welfare.

• It has to be constituted out of at least two members one of which must be a director whereas at least two directors are required.

• The promotion of the objective must be the chief use of the income of the company, and there can be no emoluments for the directors.

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Documents Required for Section 8 Company Registration:

• Company Memorandum and Articles of Association on clarifying non-profit nature of its objectives.

• Photo and residential proof of directors and members.

            An address of the registered office verified by authorities.

• The NOC meaning No Objection Certificate from the owner of the premise also within which the Registered Office is situated.

Section 8 Company Registration Process:

Obtain DSC and DIN: Just like registering for Private Ltd Company, you require the directors’ DSC and DIN.

Name Approval: Complete the name approval process of the company to ensure its name fits its non-profit activities.

Drafting MOA and AOA: Prepare the relevant papers that outline the requirements of non-profit status of the enterprise.

Filing with MCA: Enclose the document with all the necessary papers and forward the application to MCA for its approval.

Certificate of Incorporation: Once it passes the verification process, it becomes a Section 8 company and it receives the Certificate of Incorporation.

Section 8 companies also have to register with the FCRA if they wish to receive foreign funds in the process of their activities.

Conclusion

As an entrepreneur aspiring to start a business or an individual who intends to benefactor the society by establishing a non-profit making organization, one has to possess some knowledge on various aspects of company law India, trademark law in India and social business venture in India. But sealing your business as a Private Limited Company makes your business more reliable and gives restricted legal responsibility and on the other hand, trademark registration protects the peculiarity of your brand. Particularly for those who seek to provide a social cause, a Section 8 Company provides a legal entity to work for charitable projects and objectives in a lawful manner.

Thanks to sites and services offered by Ministry of Corporate Affairs and IP India, these processes carry less difficulty than ever, so businessmen can concentrate on developing their businesses while relying on professional help with registrations. Take some time to learn the differences between the various registration types so that you make the right choices for your business!