Robinhood against Hunger is a registered society under Society Registration Act, 1908. Being a non-profit organization, the society possesses the Tax Exemption Certificate under section 12 of Income Tax Act. The Society

CS Executive · Setting Up of Business, Industrial and Labour Laws · PYQS · June 2024
Robinhood against Hunger is a registered society under Society Registration Act, 1908. Being a non-profit organization, the society possesses the Tax Exemption Certificate under section 12 of Income Tax Act. The Society is also recognized NGO under section 80G of the Income Tax Act. The Promoters have decided to convert the society into Section 8 Company under Companies Act, 2013, so that food items can be delivered free of cost to poor and needy peoples in State of Madhya Pradesh under mission of "Koi Nahi Bhookha Soyega". The Society is also planning to start its own manufacturing unit for making of various types of food items. The automatic food processing unit(s) will be setup in capital of the State at primary level. Being a Company Secretary, suggest that what are benefits available to section 8 Company. Also highlight that is there any additional requirement for license to ensure the Food Safety and Standardization of food for health.

Answer & Explanation:

The Companies registered under the Section 8 of Companies Act, 2013 can avail the following benefits: Access to Tax benefits: Since Section 8 companies are charitable institutions, they have access to the various exemptions available under the Income Tax Act. Section 80G of the Income Tax Act renders plenty of tax-related benefits to these companies. Zero Stamp Duty: The Section 8 Companies are not liable to pay stamp duty on the Memorandum of Association (MOA) and Articles of Association (AOA), unlike other entities incorporated under the Companies Act, 2013. Minimal share capital: Unlike private limited, public limited, or OPC, a Section 8 company can be set up without the requirement of having minimum paid-up share capital of the Company. Exempted from suffix/prefix of name: Section 8 companies do not have the compulsion to affix the term like Limited or Private Limited in their name. These entities are registered with limited liability. Separate legal entity: Section 8 company possesses a distinct legal status which implies that entity's existence is independent of its members. The section 8 entity has perpetual existence. Improved Credibility: The flexible and transparent constitutional framework of Section 8 companies allows them to garner better credibility than other types of NGOs such as Society and trust. Privileges: Section 8 companies have been granted total/partial exemptions from various sections of the Companies Act, 2013 vide Notification No. F. No. 1/2/2014-CL.I dated June 5, 2015. FSSAI Registration or License (In case of business of edibles): This is the national authority for ensuring the safety and standardization of food items in India. FSSAI stands for Food Safety and Standard Authority of India. All retail establishments trade outlets, kiosks, eateries, caterers, and cloud kitchens must follow to FSSAI regulations, get licenses, and periodically renew their registrations. Under FSSAI, the license or registration is divided into three categories namely: FSSAI Central License FSSAI State License FSSAI State Registration Thus, Robinhood against Hunger is required to obtain FSSAI license for the manufacturing various types of food items.

Topics: Company Law

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic