Beginning a non-profit organization and assisting people is a magnanimous gesture, however, devoid of an organized form, such benevolence will not last too long. So, the ministry of corporate affairs’ decision to give a “company-like” infrastructure to manage non profit ideals was a step in the right direction. Called Section 8 Company, it has facilitated the entry of various good samaritans to continue with their good deeds.
However, the question remains, why should you choose Section 8 Company? What are the benefits? Before getting into these things let us understand this Section 8 Company.
What do you mean by a Section 8 Company?
A Section 8 Company happens to be a kind of business entity in India whose sole aim is to popularize the arenas such as science, arts, commerce, religion, environment conversation, social welfare and other charitable matters. The profits gained by such a company cannot be meant to be distributed among the members/directors, but utilized to promote the above-mentioned domains.
Reasons to turn Non-Profit Organization into a Section 8 Company
A Section 8 Company apart from providing a proper form to a generous initiative, also provides the advantages you require to aid the number of people.
Benefits of Section 8 Company registration:
Tax benefits: The government gives various tax sops to a Section 8 Company. These are certain sections under which the company avails those:
Section 80G: As per this section, the donors pertaining to a section 8 company seek rebate of up to 50% of the donations given.
Section 11: Under this section, Section 8 Companies can gain deductions of expenses from income.
No least capital needed: In case you are not having any money (apart from the registration fees), you can establish your Section 8 Company comfortably.
A Different Person: Upon incorporation, a Section 8 Company turns an entity which is distinct from its directors.
Reliable: In case your organization has a legal standing of a Section 8 Company, it automatically turns very reliable in the eyes of people.
No Stamp duty for registration: You are not required to incur the cost of stamp duty of Section 8 Company registration.
To give a simple explanation of this legal jargon: Making a non-profit organization into a Section 8 Company turns it better and trustworthy.
The method of Registering a Section 8 Company
The Section 8 Company registration procedure is very convenient. With the procedure being largely online, majority of business registration personnel will be able to assist you in setting up your company within a week or 10 days at most:
Think about the name of your Section 8 Company: Select a different name that would strike a chord among people.
Provide the documents needed:
ID proof, address proof and photo IDs of the directors/members
Address proof of the registered office space. In case you are not having a conventional office to begin your non-profit organization, you can select your own home as the office.
Digital Signature Certificate
Director Identification Number
Draft MOA and AOA: MOA or Memorandum of Association mentions the goals of your Section 8 Company. The AOA or Article of Association explains the rules and regulations of your Section 8 Company.
File the application of Section 8 Company Registration: After providing the documents and drafting the legal articles, you must consult a business professional. They can assist you file and provide your application online at the MCA website.
Certificate of Incorporation: Once the Registrar gets your application, they will evaluate the same for perfection. In case of any issue in your application, you’ll be intimated and have to repeat the entire procedure. In case they accept your application, you’ll get a certificate of incorporation, a document substantiating that your Section 8 Company is set up.
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In case you are again having queries regarding Section 8 Company and are pondering over starting such a company our team can help you out. Trust our expertise and experience to turn your dream into reality.