Section 8 Microcredit Company Registration
Overview of Section 8 Company
To give easy credit to people belonging to the marginal class of society who are traditionally considered unsuitable for lending, microcredit companies were established. These companies increase financial inclusion by giving small credit to small and medium enterprises and people belonging to the lower-income group.
NGOs intending to serve the small income group of society by lending small loans can be registered as Section 8 companies under the Companies Act 2013 or as a trust under the Trusts Act 1882. They can also register under the Societies Act 1860. Section 8 company registration is the incorporation process of such NGOs under the Companies Act 2013.
These companies can be registered with an objective to promote Science, Commerce, Art, Technology, Sports, Social Research, Education, Social Welfare, Charity, Religion, and Environment protection. Section 8 companies are allowed to work anywhere after completion of the registration process.
Benefits of Section 8 Company Registration
There are various advantages of obtaining Section 8 company registration under the Companies Act 2013. Let’s understand them in the following section.
Eligibility Criteria for Section 8 Company Registration
The following are minimum criteria that need to be met by an NGO willing to register as a Section 8 company.
Documents Required For Section 8 Company Registration
Here is a quick checklist of documents required to start the procedure of Section 8 company registration.
Procedure for Section 8 Company Registration
Compliances to be Followed Section 8 Company
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NGOs intending to serve the lower-income group of society by lending small loans can be registered as Section 8 companies under the Companies Act 2013 or as a trust under the Trusts Act 1882. They can also register under the Societies Act 1860.
The objective of Section 8 Company must be promotion of Science, Art, Sports, social welfare, or giving financial assistance to small income groups.
- At least two board meeting must be conducted per year.
- Preparation of annual financial statements.
- Annual maintenance of book of accounts.
- Mandatory audit of financial accounts and statements.
- Income tax return filing for non-exempted income.
- Filing financial statement in AOC 4 form.
- Filing annual return with other e-filing forms.
- Additional compliances related to Section 12A and 80G.