Section 8 Company Registration
What is a Section 8 company?
A company is considered a Section 8 company when it is registered as a Non-Profit Organization (NPO). Or, as stated by the Companies Acts 2013, when it is made with the objective 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; and prohibits from the payment of any dividend to its members.'
Section 8 under the Companies Act, 2013 is also known as Section 25 under the Companies Act, 1956.
A Section 8 company is similar to a Trust or Society except that Section 8 companies are registered under and administered by the Central Government's Ministry of Corporate Affairs (MCA), whereas Trusts and Societies are registered under the State Government regulations.
Advantages of Section 8 Company Incorporation
- Formation process is easy as it can be formed with only two persons.
- A Section 8 Company is recognized as a separate entity and can own, acquire and alienate, property under its own name.
- Any individual or organization can donate to Section 8 companies and receive tax benefits as well.
- Minimum paid-up capital is not required.
