In India, a non-profit organisation can be registered as Trust by executing a Trust deed or as a Society under the Registrar of Societies, or as a private limited non-profit company under Section 8 Company under the Companies Act, 2013. A Section 8 Company is the same as the popular Section 25 company under the old Companies Act, 1956, which was one of the most popular forms of Non- Profit Organisations in India. But, as per the new Companies Act 2013, Section 25 (as per the old act) has now become Section 8.
As per Section 8 (1a, 1b, 1c) of the new Companies Act, 2013, a Section 8 company can be established for “promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object”, provided it “intends to apply its profits, if any, or other income in promoting its objects” and “intends to prohibit the payment of any dividend to its members.”
To register a section 8 company in India, the process is similar to the incorporation of other companies, The applicant looking to start a section 8 company is required to file RUN for name availability. Once the name is approved, there is a further requirement of obtaining a license for a Section 8 Company, for which Form INC-12 is to be filed in order to obtain a license for such company. After obtaining the license number, the applicant can proceed further to incorporate a company by filing e form SPICe.
Requirements for obtaining Licence for Section 8 Company:
Draft MOA in format INC-13
Draft AOA in format INC-31
List of names, descriptions, addresses & occupation of the promoters as well as Board Members of the proposed company
Estimated Income and Expenditure of the next 3 years (Including Estimated Assets and Liabilities)
Form INC-14 (A declaration confirming the application by a Company Secretary in Practice on the Non – Judicial stamp paper of prescribed value;)
Form INC-15 (A declaration in the prescribed form on non – judicial stamp paper by each person making an application;)
A letter of authority;
Statement of the ground of Application
Statement of work proposed to be done
Once Licence obtains by Proposed Company, one has to file SPICe form for Incorporation of Company in a general manner in which Licence will be attached.
Time limit for obtaining Licence and uploading SPICe will be 20 days from the allocation of name by CRC.
After Filing form SPICe if proper authority thinks fit may allot Certificate of Incorporation.
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.