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Non Profit Organisation
A Non-Profit Company (NPO) is a company formed under Section 8 of the Companies Act, 2013. It is also referred to as a "Section 8 Company" or a "Not-for-Profit Company".
The main purpose of an NPO is to promote commerce, art, science, religion, charity, or any other useful objects, and not to earn profits for its shareholders. The liability of the members of an NPO is limited to the amount of guarantee provided by them.
An NPO must have at least:
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two members,
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two directors, and
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it must have an office address in India.
The incorporation process for an NPO is similar to that of a private limited company but with additional compliance requirements such as obtaining prior approval from the Registrar of Companies (ROC) and obtaining a license from the Ministry of Corporate Affairs (MCA). An NPO is eligible for various benefits such as tax exemptions, stamp duty exemptions, and other benefits as per the laws.
Letsstart, a leading legal services provider for startups and entrepreneurs offers an easy and affordable company incorporation service in India. We handle the legal paperwork and comply with all the Ministry of Corporate Affairs (MCA) requirements. Upon successful incorporation of your company, you will be issued an Incorporation Certificate (CoI), along with the PAN Card and TAN of the Company. Now you can open a current bank account and start your business.
Why choose a Non-Profit Organisation?
You can enjoy several advantages by starting a Non-Profit Organisation (Section 8 Company), including:
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Limited liability: Shareholders are only liable to the extent of their share capital, which means their personal assets are protected in the event of the NPO's failure.
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Most loved business structure: You can register your NPO as a Private Limited Company which is the most loved business structure in India. They are easy to register and almost 93% of the companies in India are registered as Private Limited Companies.
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Separate legal entity: An NPO is considered a separate legal entity from its shareholders, which allows it to enter into contracts, borrow money, sue and be sued in its own name.
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Companies act exemptions: In lieu of their non-profit structure, these organisations enjoy numerous advantages and exemptions under the Companies Act, 2013.
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Stamp duty exemptions: Being a charitable organisation, set up for the welfare of the public, the Government charges a nominal amount of stamp duty in comparison to other registered forms of business.
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Capital requirements: Quite similar to Private Limited Companies, there is no minimum capital requirement while incorporating an NPO.
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Perpetual succession: An NPO has perpetual succession which means the NPO continues to exist even if the shareholders or directors change.
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Tax deduction: On obtaining a Section 12A registration under the Income Act, 1961 an NPO can receive an exemption from paying taxes on the surplus income earned.
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Separation of ownership and management: Shareholders can be different from the management which allows them to focus on their own business while the management runs the company.
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Compliance: NPOs have to comply with various regulations, which can be beneficial in terms of building a strong reputation and gaining credibility.
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Credibility: A Non Profit Organisation is a well established, statutorily regulated entity, which improves credibility.
What are the documents required?
Without valid identity and address proof, a Section 8 Company cannot be formed in India. The documents that the Ministry of Corporate Affairs (MCA) accepts for the online NPO incorporation are listed below:
Passport size photo of both the promoters
PAN card of both the promoters
Proof of identity of both the promoters (any one of the below)
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Aadhaar Card
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Passport
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Voter ID
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Driving License
Proof of residential address of both the promoters (any one of the below)
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Bank Statement
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Electricity Bill
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Mobile Bill
Utility bill of office address (any one of the below)
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Electricity Bill
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Gass Bill
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Mobile Bill
Rent agreement, if the office premises is rented
Please Note: All the scanned documents must be clear & the text in the documents must be legible.
What are the minimum requirements?
The following conditions must be satisfied to start a Non-Profit Organisation:
Minimum two shareholders
Minimum two directors
The directors and shareholders can be the same person
At least one of the directors must be an Indian resident
All the directors must have a Director Identification Number (DIN)
Minimum authorised capital of ₹100,000 (Rs. One Lac)
No requirement for minimum paid up capital of the company
What all do you get?
Company Name Approval
Certificate of Incorporation
Company PAN & TAN
Company Masterfile
DIN for 2 Directors
Memorandum of Association
GST Certificate
Bank Account Opening
DSC for 2 Directors
Articles of Assocaition
MSME Certificate
PF & ESIC + Professional Tax
What are the charges for NPO formation?
The cost of incorporation of a Non-Profit Organisation in India depends on multiple variables, including the number of directors, share capital, state in which the company is getting incorporated, and professional expenses.
Our Comprehensive Registration Package Includes:
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Government Fees
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Name Approval Fee: Fees for obtaining name approval from the Ministry of Corporate Affairs (MCA).
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Filing Fees: Costs associated with filing forms and documents with the Registrar of Companies (ROC).
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Stamp Duty: Charges levied by the State Government as per the company's authorised capital.
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DIN & DSC Fees
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DIN Fees: Charges for applying for the Director Identification Number (DIN) of all the Directors.
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DSC Fees: Charges for applying for Digital Signature Certificate (DSC) of all the Directors and Shareholders.
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Professional Fees
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Consultation and Advisory: Expert guidance on the best business structure and compliance requirements.
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Document Preparation: Assistance in preparing all necessary documents, including MOA and AOA.
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Other Fees
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PAN & TAN Application: Fees for obtaining Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
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Other Certificates: Support for getting GST Certificate, MSME Certificate etc.
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How it works
Consultation
Schedule a free consultation call with our experts to discuss your business needs and goals. Our team will provide personalized advice on the best business structure and services for your specific requirements.
Documentation
We help you gather, prepare, and verify all necessary documents. Our comprehensive checklist and expert guidance ensure that your paperwork is complete and accurate, reducing delays and complications.
Processing
Once your documents are ready, we handle the entire incorporation process. Our team keeps you informed with regular updates, ensuring a smooth, stress free and transparent experience from start to finish.
Completion
Achieve Milestones Effortlessly as you receive your Certificate of Incorporation and compliance documents promptly. Our full support ensures you’re ready to start and operate your business successfully.
Ongoing Support
Stay compliant and stay confident with Letsstart by your side. Our comprehensive corporate compliance services ensure your business adheres to all legal requirements, allowing you to focus on growth and success.
Our Clients love us!
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Frequently Asked Questions (FAQs)
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What is a DIN?DIN is an eight digit unique Director Identification Number, with a life time validity, allotted by the Central Government to any person intending to be a Director or an existing Director of a Company.
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What is a DSC?A Digital Signature Certificate (DSC) is the digital equivalent (electronic format) of physical or paper certificate. Digital signatures provide the highest levels of assurance about the signer's identity and the authenticity of the documents they sign.
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Is a Company required to re-register in the future?No, a Company is not required to be re-registered. A Company has perpetual succession, which means it enjoys continuous existence as long as the Company complies with the statutory and regulatory filings.
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Can a home address be used as the registered office address of the Company? Is it possible to change the address after incorporation?Yes, a home address can be used as the registered office address of the Company, which can also be changed after incorporation.
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What is ROC?The Registrar of Companies (ROC) is an office under the Ministry of Corporate Affairs (MCA), which is the body that deals with the administration of Companies and Limited Liability Partnerships in India.
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Are the Directors or Shareholders required to visit the ROC for the incorporation of their Company?The entire incorporation process is completed online. The incorporation documents are filed electronically and don’t require the Directors or Shareholders to visit the ROC physically.
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Are their any rules to choose the Company name?There are certain naming guidelines put in place by the Registrar of Companies, which are required to be followed. Abiding by the guidelines ensures easy approval of the name.
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Can I work in a company as a salaried employee and also be the Director of my own Company?Yes, an employee of a Company can also be a Director in another company. However, the terms of the employment/service agreement/appointment letter have to be checked to ensure there are no restricting clauses.
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What is the minimum capital requirement for incorporating a Company and how is it invested in the business?There is no specific minimum capital requirement for incorporating a Company. The capital must be deposited by the Shareholders in the bank account of the Company for running the business.
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Can NRIs or foreign nationals incorporate a Company in India?Yes, NRIs or foreign nationals can incorporate a Company in India. However, the Act requires at least one of the Directors to be an Indian Resident.
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What is the meaning of limited liability?Limited liability is a form of legal protection for shareholders and owners that prevents individuals from being held personally responsible for their Company’s debts or financial losses. It is the condition by which shareholders are legally responsible for the debts of a Company only to the extent of the nominal value of their shares.