Section-8 Company - Incorporation's and Myths

Section 8 corporations are those formed with the goal of promoting the arts, business, education, charity, environmental protection, sports, welfare, medicines, and so on. The company's profits, as well as money earned through events and donations, cannot be used to distribute dividends to its members. The funds raised should be used for charity and promotional purposes.

The Central Government issues a certificate of formation to Section 8 firms, and they are required to follow the government's rules. If the company does not follow the laws and regulations set forth by the government, it may be forced to close down by government order.

The procedure for forming a Section 8 corporation is as follows:

1. First and foremost, you must reserve the proposed company's name by completing Part A of the Spice Plus form. Choose the nature of your company activity and submit two names. If the names are rejected by the CRC, submit two new names within 15 days after the rejection date.

2. Request that all members and directors sign a digital signature. Note: All members and directors should have a DSC because all incorporation forms are available online.

3. Once the suggested name has been reserved, you have 20 days to file the incorporation form with Spice Plus and any necessary attachments. Spice Plus is a cutting-edge electronic form that combines eight different forms into one. With this one form, you may apply for all of the following:Name Reservation

• Apply for Director Identification Number (DIN)
• PAN Application
• TAN Application
• Incorporation
• ESIC Registration
• EPFO Registration
• GSTIN Registration

4. Finally, you must file Part B of the Spice + form. You must include the names and contact information for all members and directors in this section. What is the company's authorised share capital, paid-up share capital, and registered address? All of these particulars must be filed with the appropriate attachments.

5. Complete the AGILE form to obtain the GSTIN.

6. Once you've completed all of the processes above, attach the relevant signatures and upload it to the MCA website.

7. After receiving approval from the ROC and the Certificate of Incorporation, the company must apply for approval to start a business (INC-20A) within 180 days of its incorporation date.

Is a suffix such as private limited or limited required for a Section 8 company?
According to regulation 8(7) of the Companies (Incorporation) Rules 2014, the name of the firm should contain phrases like Foundation, Trust, Forum, Association, Chambers, Federation, Confederation, and so on.
Section 8: Documents and Information Required for Registration
1. Members' digital signatures.
2. Number assigned to the director (DIN).
3. Articles of Association.
Articles of Association (Articles of Association).
5. Photographs that are the size of a passport.
6. Company and Member Email Addresses and Phone Numbers
7. The Pan Card
8. Identification of all members (voter ID, passport, or driver's licence).
9. Information on the First Directors.
10. Address Verification (Electricity Bill, Property Tax).

Myths about forming a Section 8 corporation
1. The directors' affidavit in form INC 15 is necessary.
A self-declaration regarding the topic specified in INC 15 is sufficient and accepted.
2. In Section 8 Company, INC 33 and 34 are relevant.
The form should be accompanied by a physical copy of the MOA and AOA, officially signed by the members and witnesses (professional), as well as a three-year estimated income and expenditure statement.
3. Notarize the Memorandum and Articles of Association.
The notarization of the Memorandum and Articles of Association is optional.
4. The tax imposed by the government is excessive.
In most Indian states, the stamp duty on MOA and AOA for Section 8 companies is relatively low.