In India, a non – profit organization often known as NGO can be registered as a Company under Section 8 of the Companies Act, 2013 (erstwhile Section 25 of the Companies Act, 1956) and can also be registered as Trust and as a Society registered under the provisions of Society Registration Act, 1860. Section 8 Company form of a NGO is most popular form of NGO in India. It is easy to register, run or manage a Section 8 Company in comparison of a Trust and a Society.
According to Section 8(1a, 1b, 1c) of the 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.
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Numerous Tax exemptions are provided to Section 8 Companies, specifically to the donors who are contributing to Section 8 Companies, they can claim the Tax exemption against the donation they made to a Section 8 company.
A Section 8 Company has more credibility as compared to any other Non-profit organization structure be it a Trust or Society. As it is a licensed by the central government. It has more stringent regulations such as no change in MOA and AOA can be done at any stage or situation in a Section 8 Company.
A company enjoys separate legal identity unlike partnership firms.
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Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with a bank to open your bank account.
What are the requirements to be a director?
Any person above 18 years can become a director. Non-residents can also become director of Indian companies.
What are the documents required for registration?
ID proof and residence proof of all the proposed directors, PAN card is mandatory for Indian nationals. No objection certificate from the owner of registered office or lease agreement must be produced.
What is a digital signature certificate (DSC)?
Digital signature is process to authenticate and validate records electronically. DSC is required for every director of the company as the Ministry of Corporate Affairs (MCA) mandates digital signature of directors on some documents.
What is authorized capital fee?
Authorized capital of a Company is the amount of shares a company can issue to its shareholders. Companies have to pay authorized capital fee to the government so as to be able to issue shares. Companies have to pay authorized capital fee for a minimum of Rs.1 lakh.
Can a foreign national be a director in a private limited company?
Yes, a foreign national can become director of a private limited company. Atleast one director in a company should be resident Indian.
Can NRIs or foreign nationals hold shares of a private limited company?
Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.
Can a partnership firm be converted into private limited company?
Yes, a partnership firm can be converted into private limited company by following the procedure laid down in Companies Act 2013.
How many directors can be appointed?
A private limited company must have a minimum of 2 directors while the maximum no. of directors can be upto 15.
What are the requirements with regard to the company’s name?
Company’s proposed name should be unique i.e., it should not be identical to any existing name. Names that infringe others’ rights, trademarks or patents are likely to be rejected by ROC
What is Director Identification Number (DIN)?
DIN is a unique identification number which is allotted to all the directors existing or proposed. DIN can be obtained by filing e-form DIN1 in MCA portal.
What are the statutory compliances required for a private limited company?
Every private limited company must hold a board meeting atleast once in every three months and an Annual general meeting (AGM) every year.
Can a private limited company be later converted into public limited company?
Yes, Companies Act 2013 provides rules for converting a private limited company into a public limited company.