Checklist for Incorporation of a Section 8 Company in Udaipur

As per the Companies Act, 2013, a Section 8 Company is formed with the primary goal is to promote charitable activities, art, science, social welfare, education, and more. Such companies perform on a non-profit basis and use their income and assets for the betterment of the community. Incorporation of Section 8 Company in Udaipur can be a noble choice for those, who are looking to form a meaningful impact on society. In the present article, we will explore the process of Section 8 Company registration in Udaipur. Along with that, there will be eligibility criteria, documents required and benefits of Section 8 Company registration in Udaipur.

What do you mean by Section 8 Company?

A Section 8 Company is a type of non-profit organization incorporated in Udaipur with the primary motive to encourage comer, charity, arts, sports, science, social welfare, environment, education, research, religion, environment protection, or other similar things. Section 8 of the Companies Act, 2013 defined the more objectives for the Section 8 Company need to follow. The Section 8 Company is not providing dividends to their employees and also applies their profits towards their cause. There are certain features of a Section 8 Company are:

1. Charitable motive
2. Non-profit objectives
3. License requirements
4. Limited Liability
5. No minimum share capital

Eligibility Criteria

Here are the eligibility criteria for incorporation of a Section 8 Company in Udaipur:

• Objectives: The proposed Section 8 Company must have the main object of promoting arts, commerce, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other similar object.
• Non-profit motive: The company’s primary objective should be to promote charitable activities for the public’s benefit, and its profits should be used solely for achieving the company’s charitable objectives. The company cannot have the intention of distributing dividends to its members.
• License Requirement: Before incorporating a Section 8 Company, it must obtain a license from the Central Government or the Registrar of Companies (RoC). The license is essential to ensure that the company’s activities are genuinely for charitable purposes.
• Minimum Directors and Members: The company must have at least two directors and two members (subscribers) during incorporation. These individuals can be the same.
• Registered Office: The company should have a registered office in India. This is where all official communications will be sent.
• Board Members: The proposed directors must be eligible to become directors of a company as per the Companies Act, 2013. They should have Director Identification Number (DIN) and Digital Signature Certificate (DSC).
• Applicant’s Age: The directors must be at least 18 years of age.
• No Similar Name: The proposed name of the company should be unique and not similar to any existing company or trademark.
• Address Proof and ID Proof: Gather address proof and identity proof documents for all the proposed directors and subscribers.
• Registered Office Proof: Provide proof of the registered office address, such as utility bills or rent agreements.
• NOC: If the registered office is rented, you may need a No Objection Certificate (NOC) from the landlord.
• Compliance Requirements: Understand and be willing to comply with various regulatory and legal requirements, including annual financial reporting, tax filings, and auditing.

Necessary documents required

Here is a list of the essential documents required for the incorporation process of Section 8 company in Udaipur:

• Memorandum of Association (MOA): The MOA is a legal document that defines the company’s objectives and scope of activities. It should state that the company is being formed for promoting charitable activities and other socially beneficial purposes.
• Articles of Association (AOA): The AOA outlines the rules and regulations for the internal management and operation of the company.
• Declaration by Promoters: A declaration stating that the proposed directors and subscribers have not been convicted of any offence related to the promotion, formation, or management of any company and have not been found guilty of fraud or any other financial irregularities.
• Affidavit from Directors and Subscribers: An affidavit affirming that the subscribers and directors are not related to each other.
• Consent Letters: Consent letters from all the proposed directors, stating their willingness to act as directors of the company.
• Address Proof and ID Proof: Address proof and identity proof documents for all the proposed directors and subscribers, such as Aadhar card, passport, voter ID, or driver’s license.
• Registered Office Proof: Documents providing proof of the registered office address, such as utility bills (electricity, water, gas) or rent agreement, along with a NOC from the landlord if the property is rented.
• License Application (Form INC-12): This form is filed with the RoC to apply for a license under Section 8 of the Companies Act, 2013.
• Director Identification Number (DIN): DIN for all the proposed directors. If they don’t have a DIN, they need to apply for it separately.
• Digital Signature Certificate (DSC): DSC for at least one director. The DSC is required for the online submission of documents.
• Form INC-32 (SPICe): This is the integrated form used for the incorporation of a company. It includes details of the company, directors, subscribers, and other necessary information.
• Form INC-33 (e-MOA): This form is used for the online filing of the MOA.
• Form INC-34 (e-AOA): This form is used for the online filing of the AOA.
• Proof of Payment: A copy of the challan or receipt showing payment of the necessary incorporation fees.

Process of Incorporation

Incorporation of Section 8 Company in Udaipur involves several steps. Here is a step-by-step procedure to guide you through the process:

• Step 1: Obtain Digital Signature Certificates (DSCs)- The first step is to obtain DSCs for all the proposed directors. DSCs are required to digitally sign the incorporation documents. You can get DSCs from government-approved agencies.

• Step 2: Obtain Director Identification Number (DIN)- If any of the proposed directors do not have a DIN, they need to apply for it online through the Ministry of Corporate Affairs (MCA) portal.

• Step 3: Name Reservation- Check the availability of the proposed company name on the MCA website. Choose a unique name that complies with the naming guidelines for companies. Once you have a unique name, reserve it through the RUN (Reserve Unique Name) service on the MCA portal.

• Step 4: Prepare a Memorandum of Association (MOA) and Articles of Association (AOA)

• Step 5: Apply for License- Prepare and file Form INC-12 with the Registrar of Companies (RoC) to apply for a license under Section 8 of the Companies Act, 2013. Along with the form, submit the required documents, including the MOA, AOA, and declaration by promoters.

• Step 6: Obtain License and Incorporation- If the RoC is satisfied with the application, they will issue a license under Section 8. After obtaining the license, proceed with the incorporation process. Prepare and file Form INC-32 (SPICe) along with Form INC-33 (e-MOA) and Form INC-34 (e-AOA) for incorporation.

• Step 7: Payment of Fees- Pay the necessary fees for incorporation and other filings through the MCA portal.

• Step 8: Verification and Approval- The RoC will review the submitted documents and, if everything is in order, will issue a Certificate of Incorporation (COI). This COI will include the company’s Corporate Identification Number (CIN).

• Step 9: Apply for PAN and TAN- After receiving the COI, apply for the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.

• Step 10: Commence Operations- Once the Section 8 Company is incorporated, it can commence its charitable activities and work towards achieving its objectives.

Advantages of Section 8 Company in Udaipur

Some of the key advantages of incorporating a Section 8 Company in Udaipur are:

• Legal Recognition: Section 8 Companies are registered under the Companies Act, 2013, and have legal recognition, which enhances their credibility and reputation.
• Non-profit Status: Section 8 Companies are established with the primary objective of promoting charitable activities. Their non-profit status allows them to focus solely on their social objectives without the burden of generating profits for shareholders.
• Tax Exemptions: Section 8 Companies enjoy various tax benefits, including exemptions on income tax, provided their income is used for charitable purposes and complies with the relevant tax laws.
• Limited Liability: Like other companies, members’ liability in a Section 8 Company is limited to the extent of their shareholding, protecting them from personal liability for the company’s debts and obligations.
• Perpetual Existence: A Section 8 Company has perpetual existence, meaning it continues to exist irrespective of the changes in its membership or management.
• Attracting Donations and Grants: Due to their legal recognition and non-profit status, Section 8 Companies can attract donations, grants, and funding from various sources, including government agencies, corporations, and individuals.
• Enhanced Credibility: Being registered under Section 8 gives the company enhanced credibility, making it easier to collaborate with other NGOs, government bodies, and international organizations.
• Flexible Organizational Structure: Section 8 Companies have flexibility in their organizational structure, allowing them to have a board of trustees, governing council, or similar bodies to manage their affairs efficiently.
• No Minimum Capital Requirement: Unlike other company types, Section 8 Companies do not have a minimum capital requirement, making them accessible to organizations with limited resources.
• Brand Building: Incorporating as a Section 8 Company can help build a positive brand image as the focus is on community welfare and social impact.
• Community Development: By promoting charitable activities and working for the public good, a Section 8 Company can contribute significantly to community development and welfare.
• Educational and Cultural Initiatives: Section 8 Companies often play a vital role in promoting education, arts, culture, and other social initiatives, contributing to overall societal growth.

Conclusion

Udaipur, known for its rich cultural heritage and, provides a fitting backdrop for a Section 8 Company, working towards education, healthcare, environmental protection, and various other social causes. Aspiring changemakers can influence the city’s potential and bring about lasting transformation in the lives of those in need. It is not just about fulfilling legal formalities; it is a powerful way to contribute to the greater good and create a legacy of compassion and service.