How to Register as NGO/NPO – Section 8 Company in India

NGO(Non-Government Organization) is an association that works for non-profit/ charitable purposes. An NGO established as Section 8 company under the Companies Act, 2013( ‘ Act ’) is governed by the Ministry of Corporate Affairs( ‘ MCA ’) whereas the NGO registered as a trust or society is governed by the register of state under the State Government.

Section 8 company objectification has further benefits in comparison to trust and society. This type of company has further credibility among government departments, benefactors, and other stakeholders. In this composition, we will explain how to register as an NGO in the form of Section 8 Company, under the Companies Act, 2013.

Laws in India applicable to an NGO

NGOs can be registered in India under any of the following laws

• Trust under Indian Trusts Act, 1882
• Society under Societies Registration Act, 1860
• Section 8 Company under Companies Act, 2013
• Purpose of NGO – Section 8 Company objectification

The main purpose of establishing a company as a Section 8 company is to promote non-profit objects similar as the following

• Commerce
• Art
• Science
• Sports
• Education
• Research
• Social weal
• Religion
• Charity
• Protection of terrain

Any similar other object related to the below objects

When the Central Government is satisfied that a person or association of persons propose to establish a limited company having the below- mentioned objects, it shall grant a license to register as a Section 8 company under the Companies Act, 2013( ‘ Act ’).

The gains inflows of the Section 8 company, if any, are applied towards promoting the objects of the company and aren’t distributed as tips to its shareholders.

Benefits of Section 8 Company Registration
There are numerous advantages of registering an NGO under Section 8 of the Companies Act, 2013, which are as follows

No minimal capital There’s no minimal capital demand for a Section 8 company objectification and the capital structure of Section 8 can be altered at any time as per the growth demand of the company. therefore, the finances needed for carrying the business operations can be brought in latterly, through donations and subscriptions from members and the general public.

duty Benefits The Company Auditor’s Report Order( CARO) doesn’t apply to the Section 8 company. A Section 8 company enjoys duty benefits under 80G of the Income Tax Act, 1961.

No Stamp Duty There’s no stamp duty assessed for Section 8 company objectification in India. The Section 8 company need not pay the stamp duty assessed on the Memorandum of Association( MOA) or Articles of Association( AOA) of a private or public limited company.

Separate Legal Identity Section 8 Company enrollment acquires a distinct legal identity from its members. A registered cooperation establishment can also come a member in its individual capacity and gain Directorship of Section 8 company. It has perpetual actuality and therefore, the entry or exit of any member won’t affect the operation of the Section 8 company.

Limited liability The members of the Section 8 company have limited liability as per their share subscribed. They aren’t tête-à-tête liable for the losses of the company.

Credibility Section 8 companies are more believable and dependable than any other form of a charitable organisation. It’s regulated under the vittles of the Act, therefore they need to have obligatory checkups every time and the Memorandum of Association can not be altered relating to thenon-profits objects of the company.

impunity to the benefactors The duty impunity is granted to the donations entered by the section 8 company under Section 12A and 80G of the Income Tax Act, 1961.

Section 8 Company objectification Eligibility

• An Individual, HUF is eligible to start a Section 8 company in India.
• Two or further persons who’ll act as Directors or shareholders should fulfil all the obediences and conditions of the Section 8 company objectification under the Act.
• There must be at least one director who should be a occupant of India in the Section 8 company.
• The ideal must be one or further of the following – creation of sports, social weal, the advancement of wisdom and art, education and fiscal backing to lower- income groups.
• Authors, directors, members directors of the company can not draw any remuneration in any form of cash or kind.
• No profit should be distributed among the members and directors of the company directly or laterally.

Section 8 Company objectification demand

Directors
A minimum of two directors is needed if the Section 8 company is to be incorporated as a private limited company, and a minimum of three directors in case of objectification as a public limited company. The maximum number of members is 200 in the case of a private limited company, whereas for a public limited company, there’s no similar limit.

Capital demand and Name
There’s no demand of minimal paid- up capital in the case of a Section 8 company objectification. NGOs established as a Section 8 company need not use the words ‘ Limited ’ or ‘ Private Limited ’ in their name.

Charitable Objects
Section 8 companies are incorporated withnon-profit objects. The MOA and AOA must mention thenon-profit ideal or purpose for which it’s established. Any gains earned by the section 8 company is utilised for the headway of its main objects, i.e. charitable purposes or reinvested in the company. The gains won’t be distributed among its members.

Operation
Section 8 company is managed by the Board of Directors as per the MOA and AOA of the company, unlike other trusts that are managed by the Trustees as per the Trust Deed.

Regulation under colorful Acts
A Section 8 company needs to follow the rules and regulations specified under the Companies Act, 2013. It needs to maintain books of account, and train returns with the Registrar of Companies. Section 8 company can not make any changes to the vittles of MoA and AoA without the previous blessing of the Central Government. It also needs to follow the vittles of the Income Tax Act and GST Law.

Gain DSC( Digital hand Certificate)
Digital autographs of the proposed directors of the company are needed as the forms for the enrollment process are filed online and should be digitally inked. Digital hand instruments( DSC) are issued by a government honored certifying agencies. The list of similar pukka agencies can be penetrated then. The cost of carrying a DSC varies depending upon the certifying agency. You must gain a Class 3 order DSC.

Apply for Director Identification Number
You have to apply for a noise for the proposed directors of the company. The operation for allotment of noise has to be made in Form DIR- 3 or on with the SPICe form for enrollment . You have to attach the scrutinized dupe of the necessary documents similar as a tone- attested dupe of visage, Identity and Address evidence of directors along with the form and submit it online on the MCA Portal. The form must be attested by a exercising professional who can be a chartered accountant, a company clerk, or a cost accountant.

Contact us 

• Mob No-9650214809
• Mail id-info@trumints.com
• Url-www.trumints.com