The name of a company is the first thing that a person immediately connects with at the first instance. The importance of an appropriate name increases in case of a non-profitable organization (NGO) or a charitable organization formed under Section 8 of the Company Act, 2013. These Section 8 companies function solely for the purpose of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such other object meant to uplift either a fraction or the entire society as a whole. So these institutions or companies need to focus on bringing the company into the spotlight and making a mark in the minds of the people in order to get more volunteers who would work for the organizations and achieve the goals in a faster pace.
A Section 8 company can be named and registered as an Association, Foundation, Society, Council, Club, Charities, Institute, Academy, Organization, etc. that will be registered under the Ministry of Corporate Affairs, Government of India. Since these companies are legally registered and recognised under the Company Act 2013, the procedure for registration and the naming criteria are defined under the procedure to register a company as per the sections of the Act.
Registration of Section 8 Company
A Section 8 company is different from a trust or a society only in terms of registration as a Section 8 company is registered under the Ministry of Corporate Affairs, Government of India whereas the latter is registered under the State Government regulations. A Section 8 company has better legal standing, recognition among stakeholders and donors and high credibility as opposed to a trust or a society.
However, the procedure somehow remains the same. For registering a Section 8 company, the required documents such as PAN (Permanent Account Number), address proofs, passport size photographs, etc. of all the directors and promoters, are to be collected and arranged in the necessary order. Next, it is necessary to obtain the DSC (Digital Signature Certificate) and DIN (Directors Identification Number) of all promoters and directors of the company. Now the most important step is naming the company appropriately in a way that the name denotes the cause of the company. Since the name of a company is what makes it stand out of the group, it needs to be unique in order to avoid copyright issues and also be easily associable to the company’s objective.
Approval of name
Legally registering and approving the name of the company is mandatory. This helps in avoiding any kind of copyrights issues and also making sure that no previous section 8 company has been registered under the same name. For getting an approval, an application Form INC-1 should be filed to the Registrar of the company(Central Registration Centre – CRC of Ministry of Corporate Affairs). To avoid chances of repetition of names, the applicant will have to provide six different names for name approval. Once approved, the validity of the name extends to up to 60 days. As per the Company (Incorporation) Rules, 2014, the suggested names must contain the words such as foundation, association, forum, council, chambers, etc. to be considered a valid section 8 company name.
Licensing the company
It is mandatory for a company to be licensed once the name of the company gets approved. For applying a license, an application form INC 12 along with the prescribed fees must be filed along with required documents. As for the revocation of the license, it may be revoked by the Central Government anytime as per the provisions of Rule 8(6) of the Companies (Incorporation) Act, 2014, in case of any breach of requirements of the section or violations of any conditions against the public interest, etc.
A section 8 company works for the society and its upliftment, which gives it immunity with regards to various compliances and tax remittances. This gives these companies an added advantage as opposed to other general companies. So it is necessary that these companies make a mark legally and make sure to follow the rules and let the benefits reach society.