FAQs on Companies, Trademarks and Taxes

Q. Important checklist for section 8 Company registration?

The important checklist to register the section 8 company is as follows: You must be clear with your social objectives, You must have some idea on source of your funds and the utilization of the same, The documents of atleast two person are required to register the section 8 company, Draft your objectives under memorandum very clearly to avoid any rejection from the government department.


Q. Is closing (winding up) the section 8 company is a simple task?

No, closure of section 8 company takes a lot of time and energy. It cannot be closed under any fast track mode like Strike off rules recently released. If you want to close the section 8 company, then we need to follow the full lengthy procedure to close down the company.Further, before closure of the company, we need to get the compliance upto date. Because without making fully compliant company, the application for closure will not be accepted.


Q. How taxation works under Section 8 company?

Taxation over section 8 company is treated at par with other companies. The profits are taxes @30%. However, if section 8 company is registered under section 12AA (tax exemption) of the income tax act, then Section 8 profit is completely exempt and no tax is levied on the company.However, certain compliances is to be made every year to continue enjoying the tax exemption.


Q. Is there any requirement for minimum number of members for section 8 Company?

No, there is no concept of minimum number of members for section 8 Company. Anyone who can register the section 8 company need not worry regarding the membership. The requirement of having the membership is under Nidhi Company and not under section 8 company.


Q. Explain the difference between trust, societies and Section 8 company?

The difference between the three terms is as follows:Trust-It is an simple registered NGO and does not have any specific authority,Lacks trust factor,Trust deed is the most important document,Registration cost is low. Societies- Societies are registered under the Societies registration act and hence authentic, Mild trust, as membership is an important criteria, Deed of Societies is most important document, Registration cost is somewhere between 15000 to 20,000, Compliances as per deed. Section 8- Section 8 company is the most authentic NPO or NGO which is registered under Companies Act, 2013, High on trust factor, Memorandum of Association is the most important document,Registration cost is around 25000, due to work load involved, Various compliances including audit prescribed.


Q. How to appoint auditor under section 8 Company?

Auditor under section 8 company is being appointed within 30 days by the board of Directors and no Central Government approval is required.


Q. What is the minimum capital requirement for section 8 company?

There is no minimum capital requirement for Section 8 Company in India. If you are planning to register a section 8 Company, then you don’t need to worry about the capital required.


Q. Is there any CG approval required to Register a Section 8 companies in India?

Yes, to register the section 8 company in India, the central government approval is required. CG approval is applied before company registration. When the government is satisfied that registration is seek for some serious stuff and not for tax planning, then they proceed and grant the registration.


Q. For which purposes the section 8 company can be registered?

Section 8 company can be registered for many social factors like-Education, Poverty, Disease,Blood bank, Environment protection, Other objects for general public utility.


Q. What is IEC Number?

IEC Stands for Import Export Code. No export or import shall be made by any person without an Import Export Code (IEC) number unless specifically exempted.