Section 8 Company Registration - An Overview
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 statement
- Board: Directors.
- Property management: The property of the company vests in the name of the Company and the same can be sold as per the rules mentioned under the Companies Act. (Ex: With the consent of the Board of Directors in the form of a resolution).
- Winding up or closure: Dissolution as per the bye-laws of the society, upon dissolution and after settlement of all debts and liabilities, the funds and property of the society may not be distributed among the members of the company, rather, the remaining funds and property must be given or transferred to some other section 8 company, preferably one with similar objects.
- Annual compliance: There is a requirement of annual compliance by the filing of annual accounts and the returns of company with the RoC.