MEANING OF SECTION 8 COMPANY
The idea of incorporating a non-profit making company in India is not a new term as it has been in the business community since ages. Section 8 company pertains to a established ‘for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members
As far its structure is concerned, it is much alike a trust or society as it is registered under the Central Government’s Ministry of Corporate Affairs. A Section 8 Company enjoys many privileges and exemptions under Company Law.
A Non-profit Organization is a Company which
- Has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
- 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
We, at MyCorporation, make it easy for our clients to incorporate a Section 8 company by providing all necessary legal and professional support in respect to incorporation and business management. Our highly talented legal professionals are experts in lending you full support to help you realize your business dream.
ADVANTAGES OF SECTION 8 COMPANY
EASE OF FORMATION
A Section 8 company can be formed by two persons only, by complying with the prescribed formalities of the Companies Act. Many privileges and exemptions under Company Law. Registered partnership firm can be a member
The greatest benefit of Section 8 Company is limited liability. If any liability arises then its member is not personally affected; members are only liable for unpaid shares held by them and not more than that.
SEPARATE LEGAL ENTITY
This is the most prominent quality of a Section 8 Company. It refers to the statement that company and its members are completely distinctive. The biggest advantage of a section 8 company is that its identity is distinct from that of its members.
A Section 8 company is required to perform lesser legal formalities as compared to a public company. It enjoys special exemptions and privileges under the company law. A company is a separate person having its own rights & Obligations
Death, insolvency and insanity etc of any of the member does not affect the continuity of the company. Thus the life of the company does not depend upon the life of its members.In case of death of the owner or transfer of shares
A Section 8 company is not required to publish its accounts or file several documents. Therefore, it is in a better position than a public company to maintain business secrets. Your business won’t get affected. There will be no effect on firm’s.
COMPLIANCES AFTER THE INCORPORATION OF SECTION 8 CO.
1.Apply for Sales Tax / Service Tax Registration based on the nature of Business.
2. To maintain proper Books of Accounts
3. Filing Income Tax Return of Company on or Before 30th September
4. To comply with SS-1 and SS-2
5. Get your account books Audited every year
6. To maintain minuted book and Statutory Registers
7. Filing of Form MGT-7, AOC-4 and ADT-1 every year
8. Appointment of Auditor- No intimation required to be given to ROC in case of First Auditors. Form ADT-1 to be filed within 15 days of 1st AGM of the company