- One Name Approval
- Authorised Capital 10 Lakhs
- Incorporation Certificate
- 2 DSC
- PAN Card
- TAN (TDS)
- MOA & AOA
- Share Certificate
- Company Compliance Booklet
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As per section 8 of companies act, 2013, a company can be formed with the motive of Non- profit organisation (NPO) when it has motive of promoting arts, commerce, education, charity, protection of environment, sports, science, research, social welfare, religion and intends to use its profits (if any) or other income for promoting these objectives.
Points |
Nidhi Company |
Section 8 Co. |
Micro Finance |
|---|---|---|---|
Members |
7 |
2 |
2 |
Minimum Capital Required |
5 Lacs |
No any limit |
2 crores |
RBI Licence |
No Need |
No Need |
Required |
Profit Sharing |
Yes |
No |
Yes |
Compliance |
Moderate |
Moderate |
High |
Profit Earning |
Yes |
No |
Yes |
Incorporation Cost |
Nominal |
Nominal |
High |
Suitable for |
Secured Loans & Deposits |
Unsecured Loans |
A secured & unsecured loans |
Nature of Company |
Limited |
Can be public Ltd or Pvt. Ltd. |
Can be public Ltd or Pvt. Ltd. |
Working Area |
District Level |
PAN India |
PAN India |
Saving Account Opening Facility |
Yes |
No |
No |
Deposit Facility |
Yes |
No |
No |
Every section 8 company has to file an annual return to the ROC of respective States.
AOC-4 and MGT-7 is required to file every year.as annual return.
Yes, a separate PAN card is required for a nidhi company because a section 8 company is a separate entity from owners.
As per GST Act, GST registration is mandatory if turnover exceeds Rs 20/40 lakhs but practically many banks require a GST certificate at the time of opening a bank account.
GST monthly/quarterly return is mandatory for all types of business i.e. even in case of NIL turnover GST return is mandatory to file every month/quarterly.
Yes GST registration Number can be surrendered with valid reason
No tax will be levied if section 8 companies will be registered under section 12 A of Income tax act.
Section 8 companies do not aim to make profits. Their objectives are purely charitable in nature. They aim to further causes like science, culture, research, sports, religion, etc.
Section 8 companies, unlike all other companies, do not require a prescribed minimum paid-up share capital.
Members of these companies can only have limited liability. Their liabilities cannot be unlimited in any case.
Such companies can function only if they have the Central Government's license. The Government can revoke this license as well.
People generally prefer to conduct charitable activities by forming Section 8 companies instead of regular NGOs and associations. This is because they have limited liability, so their personal assets will not be used in paying debts of the company.
Apart from individuals and associations of persons, Section 8 also allows firms to be members of these companies.
Tax Impact: Section 8 Company is a non-profit organization that is why they are exempted from some provisions of the income tax. They are also given numerous other deductions and other tax benefits. They avail benefits under section 80G of the Income Tax Act, 1961. They also are required to pay less stamp duty as compared to other organizations.
Other Compliances: Like other company Section 8 companies are also required to file an annual return with ROC in every year. An audit is mandatory and Additional compliances to fulfill the registration like 12AA, 80G, etc.