Ultimate Guide about Section 8 Company Registration in India

Non- Profit Organisation: Are you thinking to start a Non Profit Organisation in India? Now coming to the Section 8 of the Companies Act, is one of the best methods of promoting the causes like education, social welfare etc. At Lawgical India, we explain how you can easily register a Section 8 Company that deals in microfinance among others. From Section 8 company registration online to starting your microfinance program, we’ve got a course that you would be interested in.

What is a Section 8 Company?

A Section 8 Company is a legal entity formed to promote charitable activities such as:

• Social welfare

• Education

• Healthcare

• Art and culture

• Environmental protection

People in Section 8 Companies do not focus on profit as is the case with other companies. All the income and profits are then ploughed back in order to meet the overall objectives of the organization. These organisations are benefited with some tax incentives and regulatory aspects to be more preferable for non-trading organisations.

Section 8 Company Registration for Microfinance – Why to Choose This Type of Registration?

If your objective is to promote financial services to low income revenue earners, then you should register as a Section 8 Micro finance NBFC. Micro finance is very important to the poor in that it provides small loans, credit and other forms of finance to the needy or under privileged societies.

Advantages of Section 8company registration

Here are some advantages of registering a Section 8 Company:

1. Tax Benefits: Companies include the Section 8 ones are some of the parties that get the benefit of the tax exemptions under the Income Tax Act.

2. Credibility: These are companies that have been regulated by the Ministry of Corporate Affairs (MCA) this added credibility to such companies.

3. No Minimum Capital Requirement: Section 8 Company do not require any minimum paid up capital like other companies.

4. Limited Liability: The members liability is also limited to that amount of the share.

5. Separate Legal Entity: A Section 8 Company different from the members of the company which enables it to have perpetual succession.

Procedure of Section 8 Company Registration

The Section 8 company registration online has been made much easier when you take the services of Lawgical India. Here’s a step-by-step guide:

1. Obtain DSC and DIN

• DSC (Digital Signature Certificate): Needed to sign documents which are in electronic form.

• DIN (Director Identification Number): Necessary for the proposed directors.

2. Name Approval

Select the name of the company and go for the RUN (Reserve Unique Name) on the Ministry of Corporate Affairs portal.

3. Drafting Documents

Draw up the Memorandum of Association (MOA) and Articles of Association (AOA) as a guide to the nature of business and the internal management of your company.

4. File Form INC-12

INC 12 Form is to be filled and submitted to obtain a license under Section 8 of the Companies Act, 2013.• Registered office address documents Company Registration

At Lawgical India, we make the Section 8 company registration online process hassle-free. Here’s a step-by-step guide:

1. Obtain DSC and DIN

• DSC (Digital Signature Certificate): Required for signing electronic documents.

• DIN (Director Identification Number): Mandatory for the proposed directors.

2. Name Approval

Choose a unique name and get it approved through the RUN (Reserve Unique Name) service on the MCA portal.

3. Drafting Documents

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) outlining your company’s objectives and operational framework.

4. File Form INC-12

Submit Form INC-12 to apply for a license under Section 8 of the Companies Act, 2013. Attach required documents, including:

• MOA and AOA

• Declaration by directors

• Proof of registered office address

5. Certificate of Incorporation

Finally, on approval, it will issue the Certificate of Incorporation and the Section 8 Company license.

The Steps Necessary to Start a section 8 microfinance company registration

The establishment of Section 8 microfinance company is different due to the fact that microfinance is a controlled activity. Here’s what you need to know:

Eligibility Criteria

• Objective: The chief objective can only be the delivery of microfinance services.

• Directors: At least two directors are necessary for a private company, and at least three for a public company.

• Capital: Technically there are no rules regarding any minimum amount of capital to start up section 8 company, however it is imperative that the micro financing of the company is adequately funded.

Steps for Registration

1. Follow the Basic Section 8 Company Registration Process: Follow the steps that you have read above.

2. Obtain RBI Approval: As microfinance activities are captured under the RBI, this implies that other approvals may be necessary.

3. Comply with Reporting Requirements: Prepare and submit financial statements and other reports on as often as the regulatory authorities demand.

Documents Needed for Section 8 Company Incorporation• Photograph & PAN and Aadhaar of directors• Timber for registered office (rent agreement or utility bill) and Aadhaar of directors

• Passport-size photographs

• Proof of registered office (rent agreement or utility bill)

• MOA and AOA

• Declaration by directors

Industry Standards, Regulation for Section 8 Companies

Once your section 8 company registration, there are several ongoing compliance requirements:

1. Annual Returns: Duly file your annual returns with the Registrar of Companies (efficiently referred to as Roc .

2. Income Tax Filings: Pay annual income tax.

3. Board Meetings: A minimum of two meetings must be held in a financial year of the board.

4. Financial Statements: To prepare and submit financial statement that had been audited.

5. CSR Activities: Compliance with CSR provisions should be checked where provided for in the company’s charter.

Section 8 of Companies Act 2013: Its Efforts, Obstacles in Registration

While the process is straightforward, there can be challenges, such as:

• Document Preparation: As to specificity, such objectives as reviewing all the documents to make sure they conform to regulations , can also be identified.

• Name Approval: Choosing a special name that complies with the MCA guidelines.

• RBI Approvals: As a result, the RBI approval process can take a long time for microfinance companies.

We overcome these challenges effectively at Lawgical India and also make the registration process simpler.

How Lawgical India Makes Section 8 Company Registration Easier

Here’s how we make the process easier for you:

1. Expert Consultation: Our authors explain all steps and answer your questions if you have any.

2. End-to-End Assistance: All that is required in documentation, approval, and finalization is done by us.

3. Customized Solutions: No matter whether you are planning to start a Section 8 general company or a microfinance company, we understand your requirement.

4. Online Support: Through our Section 8 company registration online services, you have an Scale opportunity to register your Section 8 company without leaving your home.

Case Studies: What are some best practice Section 8 Microfinance Companies?

Case Study 1: The forecast on women’s empowerment is sounded under the program known as Women’s Empowerment Initiative.

Documents Needed for Section 8 Company Incorporation• Photograph & PAN and Aadhaar of directors• Timber for registered office (rent agreement or utility bill and Aadhaar of directors

• Passport-size photographs

• Proof of registered office (rent agreement or utility bill)

• MOA and AOA

• Declaration by directors

Industry Standards, Regulation for micro finance company registration

Once your Section 8 Company is registered, there are several ongoing compliance requirements:

1. Annual Returns: Duly file your annual returns with the Registrar of Companies (efficiently referred to as Roc.