The vibrant city like Jodhpur, where tradition meets with modern culture, and social welfare continues to thrive. The process of Section 8 Company incorporation checklist is for those, who motivate the society and make a positive impact on it. As per the Companies Act, 2013, a Section 8 Company is not for making a profit because it is set for the promotion of charity and noble purposes. In this article, we will help you in the process of incorporation of Section-8 Company in Jodhpur. Furthermore, there will be eligibility criteria for required documentation for incorporation of Section-8 Company in Jodhpur.
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Brief about Section-8 Company
The Section-8 Company is a kind of non-profit organization set up as per Section 8 of the Companies Act, 2013. The primary motive of this company is to promote specific purposes like art, sports, social welfare, science, education, religion, research, and more. This legal framework is generally designed for organizations that have philanthropic, charitable and non-profit motives. There are certain key features of Section 8 Company involved:
- Limited liability: The company’s members have limited liability, which means at the time of financial liabilities the personal assets of members will be protected.
- Non-profit purpose: The company does not provide profits to their members as income obtained must be reinvested in the organization’s purposes.
- Board of Directors: A Board of directors are must in companies, that can manage the company’s affairs.
- Required licenses: There must be a need to obtain a license from the central government, before incorporation. Also, it is necessary to get approval from the authorities.
- Compliances: The Section-8 Companies must follow the statutory regulations, file annual returns, and maintain proper accounts with the Registrar of Companies.
Eligibility Criteria for Incorporation of Section 8 Company in Jodhpur
There are certain eligibility criteria required to incorporate a Section-8 Company in Jodhpur:
- Objectives: The primary motive of a Section 8 Company must be to promote social welfare, culture, art, charitable, educational, scientific, religious, environmental protection, or any other nonprofit objectives. The company’s purpose must be clearly defined and for the benefit of the public.
- License: Before incorporating, one needs to attain a license from the Central Government as per Section 8 of the Companies Act, 2013. This license is essential and ensures that the organization is genuinely committed to nonprofit activities.
- Minimum Number of Members: A Section 8 Company can be formed with a minimum of two members. However, for larger organizations, having more members is common.
- Directors: In section 8 Company one must have two directors to manage the company’s affairs.
- Name Selection: The Section 8 Company’s name must be different and should not be similar/ identical to the existing registered one. It must also include the words “Section 8” or “Limited” at the end.
- Registered Office: Must have a registered office in India, as well as Jodhpur, where all the official notifications and communications can be done.
- Legal Compliance: The organization must adhere to all the provisions of the Companies Act, 2013, and related regulations. This includes holding regular meetings, maintaining proper records, and filing annual returns.
- Restrictions on Profits: The organization cannot distribute its profits among its members. Any income generated should be used for the charitable objectives of the company.
- Assets and Profits Utilization: All assets and profits must be utilized exclusively for promoting the company’s charitable objectives. No member or director should benefit financially from the company’s activities.
- Tax Exemption: To avail of tax benefits under Section 12A and Section 80G of the Income Tax Act, 1961 the organization must apply for and obtain these registrations after incorporation.
Documents required for incorporation of Section 8 Company in Jodhpur
Here are certain documents needed for incorporation of Section-8 Company in Jodhpur:
- Memorandum of Association (MOA): The MOA is a crucial document that outlines the objectives, mission, and purpose of the Section 8 Company. It should specifically state the charitable or nonprofit objectives that the company aims to achieve.
- Articles of Association (AOA): The AOA defines the internal rules, regulations, and operational procedures of the company. It must be drafted as per the Companies Act, 2013 provisions.
- Declaration by Promoters/Directors: They have to provide the declaration, in which mentioning that they are not disqualified from being directors as per the Companies Act, 2013.
- Estimate of Income and Expenditure: This is an essential document for the licensing process. It gets the idea of future expenditure and annual income of the Company.
- Statement of Assets and Liabilities: This gives the idea of the company’s financial standing, where listing the assets and liabilities of the company.
- Promoter’s Resolution: A resolution’s copy can be passed by promoters, including their intention to make a Section 8 Company.
- License under Section 8: Form INC-12 must be submitted to apply for a license under Section 8 of the Companies Act, 2013. This form includes details about the company’s proposed activities and objectives.
- PAN Card and Identity Proof: Copies of PAN cards and identity proofs (e.g., Aadhar card, passport, voter ID) for all proposed directors and members.
- Address Proof: Proof of the registered office’s address, which may include a utility bill, rental agreement, or ownership documents.
- NOC from the Landlord: If the registered office is leased or rented, a NOC from the landlord is required.
- Director Identification Number (DIN) for Directors: DIN is necessary for directors, and an application for the same should be included in the incorporation documents.
- Digital Signatures: Digital signatures of the proposed directors are required for filing documents electronically with the Ministry of Corporate Affairs.
- Affidavit and Consent of Directors: An affidavit affirming compliance with all legal requirements and consent to act as a director.
- Also Read: How to apply for an Instant Pan Card?
Process of incorporation of Section-8 Company in Jodhpur
The necessary steps need to be followed to incorporate the Section-8 Company in Jodhpur:
- Obtain DSC and DIN;
- Reservation of Name: The company’s name must be submitted with an application to the RoC for reservation of name.
- Draft a MOA and AOA;
- Obtain a license under Section 8: One can apply for a license under Section 8 of the Companies Act, 2013. There is a requirement to file an INC-12 Form with the RoC.
- Documents for incorporation: These are mentioned above in the present article.
- Application for PAN and TAN: After the successful incorporation, there is a need to apply for the permanent account number and Tax deduction and collection account number for your Section 8 Company.
- Registration under Section 12A/80G: In case, Section 8 Company wishes to avail of tax exemptions, one can apply for section 12A registration for income exemption and also for donors to avail tax benefits under section 80G.
- Compliances: Make sure that one can comply with all regulatory and statutory needs such as annual general meetings, regular board meetings, filing annual returns and managing proper accounts.
End Notes
A Section 8 Company in Jodhpur is not just a legal process, but a commitment to a society’s welfare. By the dedication of individuals, who are passionate about several social causes, the Section 8 Companies in Jodhpur contribute effectively to the growth and welfare of the community. The journey of incorporation includes various legal formalities and paperwork, but it is a rewarding one. The efforts one can make on this path have the potential to improve lives, lasting change, and leave a mark on the city.
