A Section 8 company under the Companies Act, 2013 or a Section 25 Company as per the Companies Act,1956 is an organization registered with an objective of promoting the fine arts, science, literature, or knowledge sharing for a purposeful matter or for charity. These are the limited companies established under the Companies Act. The Government grants these companies an exclusive license under Section 8 Companies Act. There are three main conditions for granting the license is.
- The company should form for the charitable purpose.
- Income and profits should be used towards these objects.
- The company should not pay any dividend to its members.
Requirements for online registration of Section 8 Company
For registering a Section 8 company, the following criteria must be fulfilled:
Governed by: Companies Act, 2013.
Members: Minimum of 2 Directors/Shareholders.
Important Documents: MoA, AoA and financial statements.
Property Management: All the properties belonging to a company are vested in the name of the company. These can be sold in conformity to the provisions mentioned in the Companies Act, 2013. The Act says the sale can be done with prior consent of the Company Board of Directors, when they pass a resolution regarding the same.
Closure or winding up: The property and funds of the society, upon its dissolution (as per the society by-laws) and settlement of all liabilities & debts, may not be equally distributed among the company members. Rather, the same can be transferred or given to some other company, preferably with similar objects.
Annual compliance: The company must ensure its annual compliance by filing its annual returns and annual accounts with the ROC.
- DSC and DIN of the Directors.
- Objectives and proposed work of the company.
- Financial statements like assets and liabilities, the projection for five years etc.
- Directors personal documents.
- Registered office address documents viz. rental agreement or sale deed in the name of the company, utility bills not older than two months.