A specific kind of limited corporation is a Section 8 company. It is not required to use the terms “private limited” or “limited” in its name, but it does have the same rights and limitations as a standard limited company. It will not be allowed to reap the proceeds of its operations if it is registered as a non-profit organisation.
A specific kind of limited corporation is a Section 8 company. It is not required to use the terms “private limited” or “limited” in its name, but it does have the same rights and limitations as a standard limited company. It will not be allowed to reap the proceeds of its operations if it is registered as a non-profit organisation.
A Section 8 business also has the advantage of having up to two directors. Over a regular corporation, this provides an added advantage. Additionally, section eight businesses are substantially simpler to launch. To establish a Section 501(c), you don’t need to spend a lot of money (3). The ROC will assist you in submitting your annual reports to the appropriate parties. Organizations looking to make a profit should avoid this category.
A Section 8 firm has a lower tax burden despite being more expensive than a conventional corporation. Similar to a Society or Trust, this tax-deductible entity follows a particular set of regulations. It can use its earnings to aid low-income societies because it is a registered charity. A section 8 corporation has a better reputation because it is also simpler to register. The terms “Limited” or “Private Limited” are not required to be present in the name of a section 8 corporation.
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The authority to provide licences to Section 8 Companies is entrusted to the Registrars of Companies in each jurisdiction by the central government.
An application in Form No. INC.12 must be submitted to the Registrar of Companies in order to incorporate a Section 8 Company. This application must include the following papers, among others:
Drafts of the company’s articles of association (AOA) and memorandum of association (MOA) in the required format (Form INC-13), with the subscribers’ pictures attached.
An Advocate, Chartered Accountant, Cost Accountant, or Company Secretary in practise must affix a Declaration in Form INC-14 (on stamp paper, duly notarized) stating that the draught memorandum and articles of association have been drafted in accordance with Section 8’s requirements and all rules made thereunder.
No, according to Rule 20(1) of the Companies (Incorporation) Rules, 2014, the Registrar may only receive requests for licences from limited companies that have been incorporated under this Act or a previous company statute. A firm with limitless liabilities cannot be registered as a Section 8 Company, for this reason.
The Indian Stamp Legislation, 1899 as implemented by each state, or the stamp act of each state, as applicable, governs the stamp duty on a company’s memorandum and articles of association and any increase in share capital. For stamp duty on MOA/AOA of Section 8 Companies or on an increase in authorised share capital, some jurisdictions offer preferential rates.
No, a one-person firm cannot be formed as a section 8 company or convert to a section 8 company, according to Rule 3 of the 2014 Companies (Incorporation) Rules.
A registered Trust may join a Section 8 Company without restriction under the terms of the 2013 Companies Act. The provisions of section 89 would apply to unregistered trusts.
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