Eligibility Criteria for Section 8 Company Registration in India

An Overview of Section 8 Company Registration

Following is the eligibility criteria for Section 8 Company Registration in India:

•  At least 1 Director is required and he or she should be a resident of India
•  HUF, an individual is eligible to commence a Section 8 Company in India
•  The objective of the Company should be one or more of the following – the advancement of science & art, social welfare, promotion of sports/arts, and financial support to lower-income groups
•  2 or more individuals who will act as Directors/Shareholders should fulfill all the compliance & requirements of the Section 8 Company Registration under the Companies Act
•  Directors, founders, and Members Directors of the Company cannot draw any remuneration in any form of cash or kind
•  No profit should be shared or distributed among the Directors & members of the Company indirectly/directly.

• Requirements for Section 8 Company Registration

   

  Following are some vital requirements for Section 8 Company Registration:

  1. Directors:

  For Section 8 Company Registration in India, a minimum of 2 Directors are required.

  2. Capital Requirement:

  There is no minimum paid-up capital for the Registration of Section 8 Company. NGOs in India established as a Section 8 company need not use the words Private Limited or Limited in their name.

  3. Management

  Section 8 Company is managed by the BoD (Board of Directors) as per AoA & MoA of the Company, unlike other Trusts that are handled by the Trustees as per the Trust Deed.

  4. Regulation under various Acts:

  Section 8 Company needs to follow the Rules & Regulations prescribed under the Companies Act, 2013. It needs to file returns & maintain Books of Account with ROCs. Section 8 Company can’t make any alterations to the provisions of Memorandum of Association (MoA) & Articles of Association (AoA) without prior consent of the Central Government and it should follow the provisions of the GST Law & Income Tax Act.

  5. Charitable Objects:

  In India, Section 8 Companies are registered with non-profit objectives. The AoA & MoA must mention the purpose for which it is set up. Any profits earned by the Section 8 Company is utilised for the furtherance of its main objectives i.e., charitable purposes in the Company. The profits will not be distributed among its members.

  6. DSC and DIN:

  DSC or Digital Signatures of all the proposed Company’s Directors are necessary for the Registration because the forms for the Registration process are filed online & should be digitally signed. Apart from DSC, you need to apply for DIN for the Directors and the application for allotment of DIN must be filed in Form DIR-3 or along with the SPICe+ Form for the Registration.