NOT FOR PROFIT ORGANIZATION
1. Section 8 Company
Section 8 Company is a "Not for Profit Organization" (NPO). NPO is registered for the promotion of commerce, arts, science, religion, charity, sports, education, research, social welfare, protection of environment or any other useful object and intends to apply its profits or income in promoting its objects. This form of organization prohibits the distribution of profit or income among the members. It is registered with limited liability without the addition of the words Private Limited or Public Limited in their names. The section-8 Company/ (NPO) need a minimum of three trustees; there is no upper limit to the number of trustees. The Board of Management is in the form of a Board of directors or managing committee.
An NPO/NGO means that the organization can earn profits but the promoters cannot get benefited out of those profits. An NPO/NGO is registered for the promotion of useful purposes like sports, education, research activities etc. It signifies utilization of the income for further promotion of the object and not for distribution among the promoters.
1.Key Conditions for Non- Profit Organization:
• Profit or Income of the organization shall be applied for the promotion of the main object.
• Declaration of dividend or distribution of profit to the promoters is not allowed
• No member shall be appointed as a remunerated officer.
• No remuneration / benefit shall be paid to a member being a servant / officer of the Company (except reimbursement of out of pocket expenses, reasonable interest on money lent or reasonable rent on the premises)
• Subsequent alteration of MoA & AoA requires the prior approval of Central Govt.
KEY REQUIREMENTS FOR NOT FOR PROFIT ORGANIZATION REGISTRATION IN INDIA:
• Minimum 2 Shareholders (for Private Limited Co.) and 7 Shareholders (for Public Limited Co.)
• Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.)
• The directors and shareholders can be the same person.
• DIN (Director Identification Number) for all the Directors.
• DSC (Digital Signature Certificate) for all the Directors.
Steps to Register a Non- Profit Organization / Section 8 Company, Bangalore and other parts of India:
• Finalizing the name and filing the name for approval from the Registrar of Companies and getting the name approved. The name of the proposed company shall include the words foundation, Forum, Association, Council and the like.
• Application to the Registrar along with following documents
i. Draft Memorandum and Articles of Association
ii. a declaration from CA/CS/CWA/Advocate that the draft MOA & AOA have been drawn up in conformity with the provisions of Section 8 of the companies Act 2013 and the rules made there under.
iii. An estimate of the annual income and expenditure of the company for next 3 years.
iv. An estimate of the future annual income and expenditure of the company for next 3 years.
v. Declaration by applicants
vi. Copy of Board resolution / Members' Resolution
• Within one week of making the above application, applicant has to publish a notice and a copy of the notice shall be filed with the Registrar.
• If all the documents and details are proper, Registrar issues the Certificate / License
Section 20 of the Societies Registration Act, 1860, states that the following societies can be registered under the Act: Charitable societies, military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collection of natural history, mechanical and philosophical inventions, instruments or designs.'
The Memorandum of Association and rules and regulations happens to be main instrument of any society. It contains the aims, objects and mode of management of the society. For Society Registration in India needs a minimum of 7 Managing Committee Members. There is no upper limit to the number of Managing Committee Members. The Board of Management is in the form of a governing body or council or a Managing or Executive Committee.
SunShine Corporate Solutions can help you register Non – Profit organization / Not for profit Organization, in Bangalore and Society registration in Bangalore, and other parts of India.