The Section-8 Company is one of the types of companies in India, the main objective of this company is not for profit. It's objectives are to promote fields of arts, commerce, science, researh, education, sports, charity, social welfare, religion, environmental protection etc.,. How do Section-8 companies provide these services without revenue? Yes they provide these serices by collecting donations from public, corporates. These companies will get grants from governments. The nature of Section-8 companies are similar to Trust or Society but will have lot of credibility as it is registered under central government and a statutory auditor gives the audit report at the end of the accounting period. It can appeal the public for a great cause and get the donations easily. The donors can verify the financial reports through www.mca.gov.in, the Ministry of Corporate Affairs, government of India web portal. Section-8 Company can be registered as both Private or Public.

The Government of India had announced on 26th January, 2018 that there is zero incorporation fee for the Companies registered with an Authorized Share Capital up to of Rs. 1,000,000/- (Rupees Ten Lakh), subsequently, it had been increased to Rs. 15 lakh. The Stamp Duty on MOA and AOA is not required to pay in most of the states in India. The remaining fee such as Name Availability, Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) is applicable as usual.

Who shall register a Section-8 Company: Any person or an association of persons intending to register a limited liability company for objects specified below can opt to apply for registration of Section 8 Company. The following have to be proved to the satisfaction of the Central Government that: (a) its objects includes promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object; (b) the company after incorporation intends to apply its profits, if any, or other income in promoting such objects only; and (c) the company intends to prohibit the payment of any dividend to its members.

In India, there are mainly the three types of non-profit organizations i.e. Section 8 Companies (earlier Section 25): Societies registered under section 20 of the Societies Registration Act 1860. Trusts formed under Indian Trusts Act 1882. The following are the main differences between Section-8 Company, Trust and Society.

• Two Members are rquired. They should be majors. At least one of the Trustees should be resided locally.
• Capital is the amount invested by the Tustees of the Trust.

• A

  Mmebers & Witness Documents

  1. Members & Witnesses PAN
  2. Members & Witnesses ID Proofs
     Aadhaar Card or Voter ID or Passport or Driver's License
  3. Members & Witnesses Address Proofs:
     Latest one month Savings Bank statement or
     Latest Telephone Bill on his own name or
     Latest Moblie Bill on his name or
     Latest Power Bill on his own name.
  4. Members & Witnesses latest passport size photograph
  5. Members & Witnesses Email ids
  6. Members & Witnesses Mobile Numbers linked with their Aadhar
• B

  Trust Address Proofs

  1. Registered Office Address Proof: Latest Power Bill
  2. No-objection letter cum Affidavit from the Landlord.
  3. Rental Agreement from the landlord if the premises are rented.
  4. Society Email id.

• 1

  Drafting of Trust Deed

  Through CompaniesHouse - One Day

  We will draft Trust Deed and other documents of the Trust. We will then submit with the Registrar who does the vetting.

• 2

  Submission with the Registrar

  Through Sub Registrar - One Hour Job

  We will submit the Trust Deed and other documents with the Sub-Registrar. We will make you present at the Sub-Registar office for signing the documents and pay the requisite fee.

• 3

  Certificate of Registration

  Through Sub-Registar Office - 3 to 5 Days

  After scrutiny, the Registrar will approve the form and issues you the Registered Trust Deed.

Company Bank Account Opening:

Now, simply you can open Trust's current banking account, what you need to do is submit the Registered Trust Deed and KYC of the Trustees along with office address proofs with the banker and your bank account will be opened by them.

Trust PAN & TAN:

The Trust's PAN & TAN will also be applied once the Trust Deed is registered.

GST Registration:

Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees*:

Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees**.

* This limit is increased to Rs. 40 Lakhs w.e.f 1st April 2019 for all states except the State of Telangana. Special category states ie. Jammu and Kashmir, Ladakh and Assam also opted Rs.40 lakhs limit.

** This limit is increased to Rs. 20 Lakhs w.e.f 1st April 2019 for Special Category States.

We help registering your business under GST by making application online subsequent to the business formation. This GST Registration in India is online and subject to approval with the GST Officer. Normally, with in 4 to 5 days, you will get your GSTIN and some times it may be delayed due to various reasons. If the Trust is registered under Section 12AA of the Income Tax Act, 1961 and the services provided by the Trust are for charitable cause, then GST is exempted.

License under Section-80G & 12A:

Section 80G of the Income Tax Act allows donations made to specified relief funds and charitable institutions as a deduction from gross total income. Section 12A specifies the exemption from paying income tax on surplus income of a specified relief fund or charitable institution.

A charitable institution can apply for exemption under section 12A of the Income Tax Act in Form 10A and also for permission under Section 80G. It is beneficial for both donors and charitable institution if they have both permissions from Income Tax department because the doner can claim deduction from his gross total income and the charitable institution can claim exemption from paying income tax on surplus income.

NGO DARPAN:

DARPAN id is required to get Government Grants. NITI Aayog issues this identification number.

FCRA Registration:

If your company wishes to receive contributions, donations from abroad, you need to get license under Foreign Contribution Regulation Act, 2010 (FCRA).

CSR Certificate:

If your company wishes to raise CSR (Corporate Social Resoposibility) Funds, CSR Certificate is required and it is issued by the Ministry of Corporate Affairs (MCA).

Compliance:

Once your register your Trust, you need to file certatain periodic documents with the GST department, Income Tax Department and Other Statutory Department online by paying requisite fee. Apart from filing documents, you need to maintain certain records, registers and maintain books of accounts. You need to prepare the society financials such as Profit & Loss Account, Balance Sheet, Shedules to Accounts, Notes to Accounts etc. Our team of experts will assist you in getting all these compliances done at an affordable cost.

Donations & Grants:

Trust can raise donations from public easily. This type of NGOs can get grants from Government easily. The doners will get benefited under section 80G of the Income Tax while filing their Income Tax Return and the company can claim Income Tax benefits under section 12A of the Income Tax Act, 1961 if it gets licenses under Section 80G and 12A.

Low Cost of Formation:

The cost of formation of Trust is much ceaper than that of Section-8 Company. Seven members are not required to form a Trust. Digital Signatures are not required. The Annual Compliance Cost is also lower than Section-8 Company. Only Income Tax Return filing is required on yearly basis.

Liense under FCRA

The Trust can get license under Foreign Contribution Regulation Act, 2010 easily and get contributions, donations and grants from aborad easily. Getting license under Foreign Contribution Regulation Act is easier to the Society.

Niti Ayog Registration

The Trust can get registered with Niti Ayog and get Goverment grants easily.

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