Section 8 Company Registration

Section 8 Company Registration

Introduction to Section 8 Company

A Section 8 Company is registered as a Non-Profit Organization (NPO), focusing on promoting arts, commerce, education, charity, and other social welfare objectives. It cannot distribute profits among its members and must utilize its income for promoting its objectives.

Such companies obtain an incorporation certificate from the central government and adhere to specific rules and regulations.

Purpose of NGO – Section 8 Company Incorporation

The main purpose of establishing a Section 8 company is to promote non-profit objectives such as arts, commerce, education, charity, social welfare, etc. It requires a license from the Central Government under the Companies Act, 2013.

Eligibility to Apply for Section 8 Company

  • Intention to promote specified objectives like education, charity, science, etc.
  • All profits and income must be reinvested into promoting these objectives.
  • No intention to distribute dividends to members.

Benefits of Section 8 Company Registration

  • No minimum capital requirement
  • Tax benefits under 80G of Income Tax Act
  • No stamp duty for incorporation
  • Separate legal identity
  • Limited liability for members
  • Exemption from tax for donations received

Frequently Asked Questions

Is Section 8 a small business company?

Section 8 companies cannot be treated as small companies as per Section 2(85) proviso (B).

Is it possible for LLP or a Partnership firm to be a member of Section 8 Company?

Yes, LLP or Partnership firm can be a member of a Section 8 Company under the Companies Act, 2013.

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