{"id":51803,"date":"2023-01-17T15:38:08","date_gmt":"2023-01-17T10:08:08","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=51803"},"modified":"2024-09-27T12:07:43","modified_gmt":"2024-09-27T06:37:43","slug":"faqs-on-section-8-companies","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/","title":{"rendered":"FAQs on Section 8 Companies \u2013 An Overview"},"content":{"rendered":"\n<p>Section\n8 Companies are not-for-profit organisations registered under the Companies\nAct, 2013. These Companies do not operate with a main business motive &amp;\nhence are different from the other class of Companies. The Companies Act, 2013\nmade provisions for a good variety of Companies such as Private Limited\nCompany, Public Limited Company, Foreign Company, etc. However, Section 8\nCompanies stand quite unique from others. Therefore, skimming through most FAQs\non Section 8 Companies can give a fair idea about them. In this blog, we will\ndiscuss some FAQs on Section 8 Companies.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Some_Important_FAQs_on_Section_8_Companies\" >Some Important\nFAQs on Section 8 Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#What_Do_We_Mean_By_A_Section_8_Company\" >What Do We Mean By A Section 8 Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#What_is_the_complete_procedure_to_register_a_Section_8_company\" >What is the complete procedure to register a Section 8\ncompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#What_are_the_documents_required_for_the_incorporation_of_a_Section_8_company_%E2%80%93_FAQs_on_Section_8_Companies\" >What are the documents required for the incorporation of a\nSection 8 company? &#8211; FAQs on\nSection 8 Companies&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Who_is_authorised_to_issue_a_license_of_incorporation_to_a_Section_8_Company_%E2%80%93_FAQs_on_Section_8_Companies\" >Who is authorised to issue a license of incorporation to a\nSection 8 Company? &#8211; FAQs on\nSection 8 Companies&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Are_there_any_rules_regarding_the_registration_of_a_foreign_company_as_a_Section_8_Company_in_India\" >Are there any rules regarding the registration of a\nforeign company as a Section 8 Company in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_trusts_or_co-operative_society_become_a_member_or_a_subscriber_of_a_Section_8_company\" >Can trusts or co-operative society become a member or a\nsubscriber of a Section 8 company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Is_it_compulsory_for_a_Section_8_company_to_be_incorporated_as_a_Limited_Liability_Company_%E2%80%93_FAQs_on_Section_8_Companies\" >Is it compulsory for a Section 8 company to be\nincorporated as a Limited Liability Company? &#8211; FAQs on Section 8 Companies&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Is_it_mandatory_for_section_8_Company_to_include_words_like_%E2%80%93_foundation_forum_association_federation_chamber_confederation_council_electoral_trust_etc_in_their_name_while_registering_it\" >Is it mandatory for section 8 Company to include words\nlike \u2013 foundation, forum, association, federation, chamber, confederation,\ncouncil, electoral trust etc. in their name while registering it?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_the_AOA_Articles_of_Association_of_a_Section_8_Company_have_an_entrenchment_clause_in_it\" >Can the AOA (Articles of Association) of a Section 8\nCompany have an entrenchment clause in it?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#What_are_the_advantages_given_to_a_section_8_company\" >What are the advantages given to a section 8\ncompany?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Are_there_any_relaxations_given_in_stamp_duty_payment_to_a_Section_8_company_%E2%80%93_FAQs_on_Section_8_Companies\" >Are there any relaxations given in stamp duty payment to a\nSection 8 company?&nbsp;&#8211; FAQs\non Section 8 Companies&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Is_it_allowed_for_a_trust_to_become_a_member_of_a_Section_8_Company\" >Is it allowed for a trust to become a member of a Section\n8 Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Is_it_necessary_for_the_companies_that_were_incorporated_under_Section_25_of_the_Companies_Act_of_1956_to_obtain_a_licence_under_Section_8_Companies_Act_2013\" >Is it necessary for the companies that were incorporated\nunder Section 25 of the Companies Act of 1956 to obtain a licence under Section\n8 Companies Act 2013?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_One_Person_Company_OPC_incorporated_under_Section_8_of_the_Companies_Act\" >Can a One Person Company (OPC) incorporated under Section\n8 of the Companies Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#What_are_the_annual_compliances_for_a_Section_8_company_%E2%80%93_FAQs_on_Section_8_Companies\" >What are the annual compliances for a Section 8 company? &#8211;\nFAQs on Section 8 Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_company_incorporated_under_Section_8_amend_its_Memorandum_of_Association_MOA_or_Articles_of_Association_AOA_only_BY_passing_a_special_resolution\" >Can a company incorporated under Section 8 amend its\nMemorandum of Association (MOA) or Articles of Association (AOA) only BY passing\na special resolution?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Are_digital_signatures_mandatory_for_the_process_of_registration_by_a_Section_8_company\" >Are digital signatures mandatory for the process of\nregistration by a Section 8 company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Are_Section_8_Companies_allowed_to_receive_contributions_from_outside_India_or_from_non-residents_%E2%80%93_FAQs_on_Section_8_Companies\" >Are Section 8 Companies allowed to receive\ncontributions from outside India or from non-residents? &#8211; FAQs on Section 8 Companies&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Is_it_allowed_for_the_Section_8_companies_to_be_a_holding_company_of_another_company\" >Is it allowed for the Section 8 companies to be a holding\ncompany of another company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_company_incorporated_under_Section_8_of_the_Companies_Act_be_converted_into_any_other_company\" >Can a company incorporated under Section 8 of the\nCompanies Act be converted into any other company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_company_incorporated_under_Section_8_provide_advisory_or_consulting_services_to_others_%E2%80%93_FAQs_on_Section_8_Companies\" >Can a company incorporated under Section 8, provide\nadvisory or consulting services to others? &#8211; FAQs on Section 8 Companies&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_Section_8_Company_issue_redeemable_preference_shares\" >Can a Section 8 Company issue redeemable preference\nshares?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Does_the_provisions_of_the_Companies_Auditors_Report_Order_of_2016_applicable_on_a_Section_8_Company_or_not\" >Does the provisions of the Companies (Auditors Report)\nOrder of 2016 applicable on a Section 8 Company or not?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_Section_8_company_extend_its_objective_beyond_the_state_in_which_it_was_registered_%E2%80%93_FAQs_on_Section_8_Companies\" >Can a Section 8 company extend its objective beyond the\nstate in which it was registered? &#8211;&nbsp; FAQs\non Section 8 Companies&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Is_Section_8_Company_allowed_to_invest_in_a_profit_subsidiary\" >Is Section 8 Company allowed to invest in a profit\nsubsidiary?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/corpbiz.io\/learning\/faqs-on-section-8-companies\/#Can_a_Section_8_Company_take_loan_from_its_members_and_then_pay_interest_on_that_%E2%80%93_FAQs_on_Section_8_Companies\" >Can a Section 8 Company take loan from its members and\nthen pay interest on that? &#8211; FAQs on Section 8 Companies<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Some_Important_FAQs_on_Section_8_Companies\"><\/span>Some Important\nFAQs on Section 8 Companies <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the FAQs on Section 8 Companies:<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Do_We_Mean_By_A_Section_8_Company\"><\/span>What Do We Mean By A Section 8 Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A non-profit\norganisation may register in India as a trust, as a society, or as a Private\nlimited corporation under&nbsp;<em>Section 8<\/em>&nbsp;of the Companies Act of\n2013. A&nbsp;<em>Section 8&nbsp;<\/em>company is the same as the famous Section 25\nCompany under the former Companies Act 1956, which was one of India&#8217;s most\ncommon types of Non-Profit Organisations.&nbsp;<\/p>\n\n\n\n<p>The purpose of\nincorporating a <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/section-8-company-registration\">section 8 company<\/a><\/strong> is to promote commerce, art,\nscience, sports, education, research, social welfare, religion, charity, and\nthe protection of the environment. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_complete_procedure_to_register_a_Section_8_company\"><\/span>What is the complete procedure to register a Section 8\ncompany? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The first step is\nto obtain a&nbsp;Digital Signature\nCertificate (DSC)of the proposed Directors of the\ncompany;<\/p>\n\n\n\n<ul>\n<li>After receiving a DSC, file Form DIR-3 with the Registrar Of Companies to get a DIN;<\/li>\n\n\n\n<li>Once the DIR-3 is approved;<\/li>\n\n\n\n<li>Draft MOA and AOA;<\/li>\n\n\n\n<li>File the Form with Form INC-12 with the Registrar Of Companies;&nbsp;<\/li>\n\n\n\n<li>Once the Form gets approval from the Central Government, a license will be issued.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_documents_required_for_the_incorporation_of_a_Section_8_company_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>What are the documents required for the incorporation of a\nSection 8 company? &#8211; FAQs on\nSection 8 Companies&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Registering as\na&nbsp;<em>Section 8<\/em>&nbsp;Company is outlined in the Companies Act of 2013.\nAn application in Form No. INC.12 must be filed to the Registrar of Companies,\nand the supporting documentation is listed below:<\/p>\n\n\n\n<ul>\n<li>If the promoters and\n     directors are citizens of India, PANs cards for each director are\n     required. Along with this, additional identifying documents such as a\n     voter ID, an Aadhar card, or a driver&#8217;s licence may be provided;<\/li>\n\n\n\n<li>A passport is necessary as\n     identification in a situation where the director is a foreign national;<\/li>\n\n\n\n<li>Any proof of residence, this\n     could be a telephone bill, electricity bill, etc. It cannot be more than\n     two months old;<\/li>\n\n\n\n<li>The most recent\n     passport-sized photograph of each director and promoter;<\/li>\n\n\n\n<li>Address proof for the\n     company&#8217;s registered office. This could be the lease and payment receipt,\n     or any document proving ownership, such as the sale deed, is necessary if\n     the director is the one who owns this;<\/li>\n\n\n\n<li>Director Identification\n     Number (DIN) (if any);<\/li>\n\n\n\n<li>Digital certificate (if\n     any);<\/li>\n\n\n\n<li>Memorandum of Association\n     &#8211;&nbsp;<strong>Form no. INC \u2013 13;<\/strong><\/li>\n\n\n\n<li>Articles of Association\n     &#8211;&nbsp;<strong>Form no. INC \u2013 13;<\/strong><\/li>\n\n\n\n<li>A Declaration that the\n     draught MOA &amp; AOA are consistent with the provisions &amp; regulations\n     of section 8 &#8211; Form<strong>&nbsp;INC-14;&nbsp;<\/strong><\/li>\n\n\n\n<li>A declaration on stamp paper\n     &amp; notarised by each member of the company &#8211;&nbsp;<strong>Form INC-15.&nbsp;<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_authorised_to_issue_a_license_of_incorporation_to_a_Section_8_Company_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>Who is authorised to issue a license of incorporation to a\nSection 8 Company? &#8211; FAQs on\nSection 8 Companies&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Registrars of\nCompanies, also known as ROCs of respective jurisdictions, are authorised to\nissue a license to Section 8 Companies. The power has been delegated to ROCs by\nthe Central Government.&nbsp; <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_there_any_rules_regarding_the_registration_of_a_foreign_company_as_a_Section_8_Company_in_India\"><\/span>Are there any rules regarding the registration of a\nforeign company as a Section 8 Company in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>No, because as per\nthe Company Act of 2013, a corporate company that is incorporated outside India\nto carry out not-for-profit activities cannot fall under the preview of a\nforeign company. As there are no business activities that are being carried\nout. Therefore, the respective company or entity cannot be termed as a foreign\ncompany. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_trusts_or_co-operative_society_become_a_member_or_a_subscriber_of_a_Section_8_company\"><\/span>Can trusts or co-operative society become a member or a\nsubscriber of a Section 8 company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, they can, as\nper <strong>the\nCompanies Act of 2013<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/companies-act\/companies-act-2013.html\"><strong>[1]<\/strong><\/a><\/sup>. The act per say\ndoes not prohibit a Trust\/Co-Operative Society from becoming a member of a\nSection 8 company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_compulsory_for_a_Section_8_company_to_be_incorporated_as_a_Limited_Liability_Company_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>Is it compulsory for a Section 8 company to be\nincorporated as a Limited Liability Company? &#8211; FAQs on Section 8 Companies&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 8 has the\nchoice to incorporate aslimited by shares\/by Guarantee (with or\nwithout share capital). <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_mandatory_for_section_8_Company_to_include_words_like_%E2%80%93_foundation_forum_association_federation_chamber_confederation_council_electoral_trust_etc_in_their_name_while_registering_it\"><\/span>Is it mandatory for section 8 Company to include words\nlike \u2013 foundation, forum, association, federation, chamber, confederation,\ncouncil, electoral trust etc. in their name while registering it?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, it is\nmandatory to include such words in the name. According to the rule 8(7) of the\nCompanies (Incorporation) Rules of 2014, all the companies that are\nincorporated under Section 8 of the Act to include the words like foundation,\nforum, association, federation, chambers, confederation, council, etc., in the\nname.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_the_AOA_Articles_of_Association_of_a_Section_8_Company_have_an_entrenchment_clause_in_it\"><\/span>Can the AOA (Articles of Association) of a Section 8\nCompany have an entrenchment clause in it?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, AOA can have\nan entrenchment clause. As per Section 5(3) of the act an Articles of\nAssociation (AoA) of a Section 8 Company can have an entrenchment clause.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_advantages_given_to_a_section_8_company\"><\/span>What are the advantages given to a section 8\ncompany?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>Section 8<\/em>&nbsp;companies work solely for the benefit of the public. Therefore\nthey receive specific benefits. Let&#8217;s examine these benefits:&nbsp;<\/p>\n\n\n\n<ul>\n<li>No minimum capital\nis required for a Section 8 firm, unrelated to other companies. They have the\nflexibility to change their capital structure as needed.<\/li>\n\n\n\n<li>When registering,\nstamp duty must typically be paid, although section 8 companies are exempt from\nthis requirement.&nbsp;<\/li>\n\n\n\n<li>Any registered\npartnership business may join a&nbsp;<em>Section&nbsp;<\/em>8 company as an\nindividual member.<\/li>\n\n\n\n<li>Companies registered under\u00a0<em>Section 8<\/em>\u00a0of the 2013 Companies Act are eligible for a number of tax benefits. For instance,\u00a0<em><strong><a href=\"https:\/\/corpbiz.io\/80g-and-12a-registration\">Sections 12A and 80G<\/a><\/strong><\/em>\u00a0of the Income Tax Act provide tax incentives to contributors of Section 8 companies.<\/li>\n\n\n\n<li>A company\nincorporated under Section 8 is more credible than any other Not for Profit\nOrganization (NPO), such as a trust. This is because the corporation is\nlicenced by the Central Government, which may impose strict regulations. As a\nresult, the organisation gains a more trustworthy reputation.<\/li>\n\n\n\n<li>Like any other\ncompany, a Section 8 company is regarded as a distinct legal entity. It has a\nseparate legal status from members. Thus, it can be sued and being sue in its\nown name. It also has a perpetual existence.<\/li>\n\n\n\n<li>Section 8\nbusinesses have a lot of flexibility because it is considerably simpler to\ntransfer ownership and title in these.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_there_any_relaxations_given_in_stamp_duty_payment_to_a_Section_8_company_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>Are there any relaxations given in stamp duty payment to a\nSection 8 company?&nbsp;&#8211; FAQs\non Section 8 Companies&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes. One of the\nbenefits of incorporating a Section 8 company is relaxation on stamp duty.\nStamp duty is paid on a memorandum of association and articles of association.\nAll the provisions related to stamp duty are governed under the Indian Stamp\nAct of 1899.&nbsp; <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_allowed_for_a_trust_to_become_a_member_of_a_Section_8_Company\"><\/span>Is it allowed for a trust to become a member of a Section\n8 Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, a trust can\nbecome a member; there is no as such restriction mentioned under the Companies\nAct of 2013.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_necessary_for_the_companies_that_were_incorporated_under_Section_25_of_the_Companies_Act_of_1956_to_obtain_a_licence_under_Section_8_Companies_Act_2013\"><\/span>Is it necessary for the companies that were incorporated\nunder Section 25 of the Companies Act of 1956 to obtain a licence under Section\n8 Companies Act 2013?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>No, there are no\nsuch requirements. All the existing companies are not required to obtain any\nsuch licence since they are protected under Section 465 of the Companies Act of\n2013.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_One_Person_Company_OPC_incorporated_under_Section_8_of_the_Companies_Act\"><\/span>Can a One Person Company (OPC) incorporated under Section\n8 of the Companies Act?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>No. it is prohibited to incorporate a One Person Company under Section 8\nCompany. This is as per rule 3 of the Companies (Incorporation) Rules, 2014.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_annual_compliances_for_a_Section_8_company_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>What are the annual compliances for a Section 8 company? &#8211;\nFAQs on Section 8 Companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li><strong>Form MGT-7 for filling<\/strong><strong> <\/strong>an annual return of the\ncompany. This must be filled within sixty days of the last annual general\nmeeting (AGM).<strong><\/strong><\/li>\n\n\n\n<li><strong>AOC-4 for filling <\/strong>financial statement of the company. This\nmust be filled within 30 days of\nlast AGM.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_company_incorporated_under_Section_8_amend_its_Memorandum_of_Association_MOA_or_Articles_of_Association_AOA_only_BY_passing_a_special_resolution\"><\/span>Can a company incorporated under Section 8 amend its\nMemorandum of Association (MOA) or Articles of Association (AOA) only BY passing\na special resolution?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, a Section 8 company\nhas all the power to amend its MOM or AOA by passing the special resolution.\nThough there is an added point to this, such alterations can only be done with\nprior approval of the ROC (Registrar of Companies). <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_digital_signatures_mandatory_for_the_process_of_registration_by_a_Section_8_company\"><\/span>Are digital signatures mandatory for the process of\nregistration by a Section 8 company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If filling out documents through an\nonline portal, digital signatures are the only secure way to do so. So all the\ne-forms on the Ministry of Corporate Affairs (MCA) portal require a digital\nsignature of the authorised person. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_Section_8_Companies_allowed_to_receive_contributions_from_outside_India_or_from_non-residents_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span><strong>Are Section 8 Companies allowed to receive\ncontributions from outside India or from non-residents<\/strong>? &#8211; FAQs on Section 8 Companies&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, a section 8 company\ncan receive such contribution or donations, but only by fulfilling some\nrequirements under the Foreign Contribution and Regulation Act of 2010. <\/p>\n\n\n\n<p>The provisions the Foreign\nContribution and Regulation Act of 2010 supplement provisions under the\nCompanies Act of 2013.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_allowed_for_the_Section_8_companies_to_be_a_holding_company_of_another_company\"><\/span>Is it allowed for the Section 8 companies to be a holding\ncompany of another company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, there is no such\nrestriction on section 8 therefore Section 8 company can promote another\ncompany and be a holding company of another company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_company_incorporated_under_Section_8_of_the_Companies_Act_be_converted_into_any_other_company\"><\/span>Can a company incorporated under Section 8 of the\nCompanies Act be converted into any other company? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Section 8 Company can easily\nbe converted into any other company including the One Person Company. This has\nbeen talked under Section 8(4)(ii) read with Rules 21 and 22 of Companies\n(Incorporation) Rules of 2014. But there are some restriction as per other\nlaws, like the Income Tax Act of 1961. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_company_incorporated_under_Section_8_provide_advisory_or_consulting_services_to_others_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>Can a company incorporated under Section 8, provide\nadvisory or consulting services to others? &#8211; FAQs on Section 8 Companies&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, a Section 8 company can provide such services, though it should\nonly be in line with the objects stated under Section 8(1)(a) of the Companies\nAct of 2013.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_Section_8_Company_issue_redeemable_preference_shares\"><\/span>Can a Section 8 Company issue redeemable preference\nshares? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>No a Section 8 company cannot issue redeemable preference shares as per\nthe restrictions provided under Section 8(1) of the Companies Act. As per\nprovision a Section 8 company cannot distribute profits and payment of any\ndividend to its members. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Does_the_provisions_of_the_Companies_Auditors_Report_Order_of_2016_applicable_on_a_Section_8_Company_or_not\"><\/span>Does the provisions of the Companies (Auditors Report)\nOrder of 2016 applicable on a Section 8 Company or not?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>No, as per the provisions of the Companies (Auditors Report) Order of\n2016, under para 2(iii), the act does not apply to Section 8 companies. Hence\nthere is no need for these companies to adhere to rules regarding this.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_Section_8_company_extend_its_objective_beyond_the_state_in_which_it_was_registered_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>Can a Section 8 company extend its objective beyond the\nstate in which it was registered? &#8211;&nbsp; FAQs\non Section 8 Companies&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, a Section 8 Company\ncan definitely do so. As per Clause 4 of the Form INC 13 under rule 19(2) of\nthe Companies (Incorporation) Rules of 2014, provide such power to Section 8 Company\nto change the state for its registered office. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_Section_8_Company_allowed_to_invest_in_a_profit_subsidiary\"><\/span>Is Section 8 Company allowed to invest in a profit\nsubsidiary? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes, there are no such restriction\nfor section 8 companies to invest in \u2018for profit\u2019 companies. Therefore, they\nare allowed to have profit subsidiary. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_a_Section_8_Company_take_loan_from_its_members_and_then_pay_interest_on_that_%E2%80%93_FAQs_on_Section_8_Companies\"><\/span>Can a Section 8 Company take loan from its members and\nthen pay interest on that? &#8211; FAQs on Section 8 Companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Thought a Section 8 company is allowed to take loan from its members and then pay interest on that. Still one must go through Chapter five of the Companies Act before taking such loan.&nbsp; <\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-section-8-company-registration\/\">A Closer Look At Benefits Of Section 8 Company Registration<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Section 8 Companies are not-for-profit organisations registered under the Companies Act, 2013. These Companies do not operate with a main business motive &amp; hence are different from the other class of Companies. The Companies Act, 2013 made provisions for a good variety of Companies such as Private Limited Company, Public Limited Company, Foreign Company, etc. [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":51804,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[325],"tags":[3016],"acf":{"service_id":"11"},"authorName":"Astitva Kumar","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/12\/MicrosoftTeams-image-27.jpg","authorDescription":"Astitva Kumar is an advocate by profession and has completed her BBA. LLB from IP University. She is an avid reader, researcher, and legal writer. Her areas of interest include mediation, conflict resolution, finance, cyber laws, and taxation.","postViews":9138,"readingTime":8,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51803"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=51803"}],"version-history":[{"count":4,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51803\/revisions"}],"predecessor-version":[{"id":66474,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51803\/revisions\/66474"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/51804"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=51803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=51803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=51803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}