Section 8 company

We hope that this clears out all your queries with respect to model how section 8 company shall be formed and how it shall work!

  • What is Section 8 Company?
    • A company formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.

 

  • Basic things to take care of?
    • It shall work like any Other Private Limited Company BUT
    • The profits are applied ONLYfor development and promoting the events mentioned in its MOA; and the profits are not to be distributed in dividend or any other form.
    • Timely compliance of all requirement by Companies Act.

 

  • Management of the Company?
    • Section 8 Companies are managed by the Board of Directors based on the MOA and AOA of the Section 8 Company. In this case NIT Shall appoint at least 2 Board members to take care of the matters of this company.
    • The Duties and Powers of each of the Board/Committee member shall have to be discussed and finalised pre-Incorporation in MOA as to give effect to the same.
    • In order to delegate power to management Power of attorney shall be made in favour of the directors of the proposed company.

 

  • Documents required For Registration?
    • All basic documents such as Aadhar Card, Pan Card, address Proof MOA and AOA. We shall send a detail listing once the same materialises.

 

  • Registration Process Brief
    • To obtain the required documents and arrange them in the necessary order
    • Preparing DSC and DIN
    • Name Approval
    • Drafting MOA and AOA
    • Applying for License
    • Filling forms with ROC

 

  • Books Maintenance?
    • Same as in case of Private Limited Books

 

  • How things will Work? (Proposed)
    • The management is Planning to Set up an Incubation centre for the budding entrepreneurs, innovators and startups. The same shall be governed by the bye laws mentioned in the MOA AOA of the Section 8 Company.
    • Startup who wish to get incubated shall have to formally apply for Incubation to the head of respective department/Committee Member.
    • Criteria’s shall be laid down to choose a startup in the incubation centre.
    • Committee shall schedule a regular meeting (Weekly, Biweekly as deem fit)
    • There shall be separate discussion for Organisation workings to be included in MOA.

 

  • Time for registration of the Company?
    • Once all the required Documents are provided, it shall take approx. 25 – 30 days to get the company registered.

 

  • Other details
    • A Section 8 Company cannot use the Suffix as Pvt Ltd or Ltd
    • Articles of Section 8 Company can only be amended with prior approval of Central Government, otherwise, the Articles cannot be amended.

Hope this clears most of the queries with regards to Section 8 Company.

Please feel free to reach at +91 8871897804 (Prannay ) or Mail at we@applylegal.com in case of any concerns.

By Rohit Agarwal

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