8/11/2017 PROCEDURE FOR FORMATION OF SECTION 8 COMPANY

PROCEDURE FOR FORMATION OF SECTION 8 COMPANY

August 01, 2017

PROCEDURE FOR FORMATION OF SECTION 8 COMPANY

A Non-profit organisation can be registered as a
Company under Section 8 of the Companies Act,
2013. It can also be registered as Trust or a
Society. Section 8 company can be incorporated
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.

STEP BY STEP PROCEDURE FOR FORMATION OF SECTION 8:

1. DSC/ DIN - To obtain a Digital Signature Certificate (DSC) and Director Identification Number
(DIN) for all the proposed Directors of the Company if they dont have the same.

2. Name Approval - An application in Form No.INC 1 has to be filed with ROC (Central
Registration Centre (CRC) of MCA) for name approval of proposed Section 8 Company. The
Applicant can give maximum six names in order of preference.

The name once approved by the authority is valid for sixty days. Please take note that the name of the
Section 8 company shall include any of the following word i.e. Foundation, Forum, Association,
Federation, Chambers, Confederation, Council, Electoral Trust and the like etc in accordance with
Rule 8(7) of the Companies (Incorporation) Rules, 2014.

3. MOA and AOA - After obtaining name approval, MOA and AOA is to be drafted and then filed
with the ROC along with other documents in e-Form INC 12 for the issuance of license under section
8 of the Companies Act, 2013.The subscription pages of MOA and AOA company shall be signed by
each subscriber to the memorandum who shall mention his name, address, description and
occupation, if any, in the presence of at least one witness who shall attest the signature and shall
likewise sign and add his name, address, description and occupation, if any.
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8/11/2017 PROCEDURE FOR FORMATION OF SECTION 8 COMPANY

4. Form INC-12 (Application for License u/s 8) - File form INC-12 for the issuance of license
under section 8 of the Companies Act, 2013 along with the following attachments:

INC-13 Memorandum of Association.

Article of Association.

INC-15 Declaration by each Subscriber to MOA (On Non- judicial stamp paper of Rs. 100/-
and duly notarized).
Estimated statement of Income & Expenditure for Next three years and it should be signed the

proposed Promoters.
List of proposed Promoters and Directors of the Company.

Subscribers page (AOA & MOA) should be hand written by the Subscriber (s), and witness.

After the approval (REGIONAL DIRECTOR) of Form INC 12, a license under Section 8 of the
Companies Act, 2013 is issued in Form INC-16.

5. Filing of Incorporation Forms on MCA Portal: The following forms are required to be filed
with the RoC after issuance of the license: I.

I. Form No. INC 7 (Application for incorporation of the Company) along with the following
attachments:

Memorandum of association.
Articles of Association

Declaration in Form No. INC-8

An affidavit from each of the subscriber to the memorandum in Form No.INC-9

Proof of residential address of Subscribers Specimen Signature in Form No. INC-10

Proof of Identity of Subscribers NOC in case there is a change in the promoters after name

approval.
PAN card (in case of Indian national) CTC of resolution/ board resolution authorising to

subscribe to MOA Optional attachment, if any

II. Form No. INC 22 (notice of situation of registered office) along with the following
attachments:
Conveyance/Lease Deed/ Rent Agreement (Proof of ownership)
Electricity Bill Not older than 2 months.
No Objection Certificate on the letter head of promoter for using the premises.

III. Form No. DIR 12 (appointment of directors of the company) along with the following
attachments:

DIR-2 (consent to act as Directors)

Affidavit by the Directors for Not accepting Deposits (On Non- judicial stamp paper of Rs.

100/- and duly notarized).

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8/11/2017 PROCEDURE FOR FORMATION OF SECTION 8 COMPANY

INC-9 Declaration by each Subscriber to Memorandum of Association (On Non- judicial

stamp paper of Rs. 100/- and duly notarized).

6. Certificate of Incorporation- If the Concerned ROC is satisfied with the incorporation forms, a
Certificate of Incorporation is issued by the Registrar of Companies along with a unique Company
Identification Number (CIN).

7. Revocation of the licence - Rule 8(6) the Companies (Incorporation) Rules, 2014 provides that the
Central Government may, by order, revoke the licence granted to a company if the company
contravenes any of the requirements of this section or any of the conditions subject to which a licence
was granted or the affairs of the company are conducted fraudulently or in a manner violative of the
objects of the company or prejudicial to public interest. Without prejudice to any other action against
the company, the Central Government may direct the company to convert its status and change its
name to add the word Limited or Private Limited to its name and there upon the Registrar shall,
without prejudice to any action that may be taken, on application, in the prescribed form, register the
company accordingly. Such order shall not be passed unless the company is given reasonable
opportunity of being heard.

A copy of such order is to be given to the Registrar.The Central Government may direct the company,
the licence of which has been cancelled, if it is satisfied that it is essential in the public interest, to
be wound up or amalgamated with another company registered under this section. Such order shall be
passed only after giving reasonable opportunity to the company of being heard. In case of
amalgamation, the Central Government may provide for such amalgamation to form a single
company with such constitution, properties, powers, rights, interest, authorities and privileges and
such liabilities, duties and obligations as may be specified in the order. 8.

8. Penalty - If a company makes any default in complying with any of the requirements laid down in
this section, the company shall, without prejudice to any other action under the provisions of this
section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to
one crore rupees and the directors and every officer of the company who is in default shall be
punishable with imprisonment for a term which may extend to three years or with fine which shall
not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or
with both; Provided that when it is proved that the affairs of the company were conducted
fraudulently, every officer in default shall be liable for action under section 447.

DISCLAIMER- This write up is based on the understanding and interpretation of

author and the same is not intended to be a professional advice.

by Shubham Katyal

cs.shubhamkatyal2k16@gmail.com

https://www.facebook.com/shubham.katyal.3

https://www.linkedin.com/in/shubham-katyal-5334a8b0?t
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