What is NGO/Section 8 Company?
Non-Governmental Organizations, or NGO's, are nonprofit organizations founded to deal with humanitarian, social, or environmental problems. Promoting social welfare or advocating for a particular cause, it functions autonomously from governmental oversight. One particular kind of NGO that aims to further charity goals is a Section 8 Company, as defined by the Indian Companies Act. In addition to requiring government approval for establishment, it does not divide revenues among its members. Instead than making money, the goal of both kinds is to benefit society.
Advantages of Section 8 Company
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In Section 8, if profits and donations are used solely to further the goals of the company and no dividends are given to its owners or members, then a company, also known as a non-profit organization (NPO), is one that was founded to advance business, the arts, sciences, religion, sports, education, research, charitable causes, or any other beneficial social object
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Section 8 companies are eligible for numerous benefits and exemptions under Company Law
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Non-application of the Company Auditor's Report Order (CARO)
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Exemption from the Minimum Paid-Up Capital Requirement
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A registered partnership business can join in its own right
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Stamp duty exemption for registration
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Income Tax deductions under Section 80G granted to the Company's donors
Minimum General Requirements for Section 8 Company
- A minimum of two shareholders for a private nonprofit organization and seven shareholders for a public nonprofit organization
- A minimum of two directors for a private limited company and three directors for a public company
- Shareholders and directors may be the same individual
- Each Director's DIN (Director Identification Number)
- Each Director's DSC (Digital Signature Certificate)
- Proof of address for the selected office location
Required Documents for Section 8 Company
- Articles of Association and Memorandum of Association
- Declaration by the first director(s) and subscriber(s) (no affidavit is required)
- Proof of office address, like copy of utility bills like electricity, water, or gas bill
- Copy of the certificate of incorporation of an overseas corporate body (if any)
- A duplicate of the foreign corporate body's certificate of incorporation
- Resolution passed by the promoter company
- Approval of Company Name
- Nominee Consent (INC-3)
- Identity and residential proof of applicant, nominees and subscribers
- Digital Signature Certificate
- Unregistered companies declaration