A Section 8 Company, governed by Section 8 of the Companies Act, 2013 in India (previously Section 25 of the Companies Act, 1956), is a legal entity formed for promoting charitable purposes such as art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or other similar objectives. Here are some key aspects of a Section 8 Company:
Non-profit nature: The primary aim of a Section 8 Company is to promote charitable activities and not to generate profits for its members.
Limited liability: Members of a Section 8 Company have limited liability, meaning their personal assets are protected in case the company faces financial losses or legal liabilities.
Tax exemptions: Section 8 Companies enjoy various tax exemptions under the Income Tax Act, subject to certain conditions. They may be eligible for exemptions on income, donations received, and other tax benefits.
No requirement for minimum capita : Unlike other types of companies, a Section 8 Company does not require a minimum paid-up capital for incorporation.
Name without suffii : Section 8 Companies do not need to use words like "Limited" or "Private Limited" as part of their name.
Utilization of profits : Any profits generated by a Section 8 Company must be utilized solely for promoting its objectives. No dividends are distributed to its members.
Regulatory compliance: Section 8 Companies need to comply with various regulatory requirements under the Companies Act, such as filing annual returns, conducting board meetings, and maintaining proper accounting records.
Promotion of specified activities: Section 8 Companies can engage in a wide range of activities aimed at promoting social welfare, education, healthcare, environmental sustainability, cultural development, and other charitable purposes.
Flexibility in governance: Section 8 Companies have flexibility in their governance structure, allowing them to operate efficiently while ensuring compliance with legal requirements.
Overall, Section 8 Companies play a vital role in driving social change and development initiatives by channeling resources and efforts towards charitable causes and welfare activities. They are instrumental in addressing various social, environmental, and cultural challenges faced by communities across India.
Non-profit Status Confirmation: A declaration confirming that the Section 8 company is established for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any other charitable objective, and not for profit.
Objectives and Activities: Detailed disclosure of the objectives and activities of the Section 8 company, ensuring they align with the permissible activities under GST regulations.
Utilization of Funds: Disclosure of how the funds collected by the Section 8 company will be utilized solely for achieving its objectives and not for personal gain or profit.
Board Members and Key Personnel: Disclosure of the names, addresses, and roles of all board members and key personnel involved in the management of the Section 8 company.
Compliance with Income Tax Act: Confirmation that the Section 8 company complies with provisions of the Income Tax Act, including sections related to non-profit organizations.
Financial Statements: Submission of audited financial statements, demonstrating the financial viability and transparency of the Section 8 company.
Activities Related to GST: Disclosure of any activities or transactions that may involve GST implications, such as supply of goods or services, fundraising events, etc.
To register a Section 8 Company (under Section 8 of the Companies Act, 2013 in India), you'll need to prepare and submit several documents and details to the Registrar of Companies (RoC). Here's a general list of the documents and information required:
Memorandum of Association (MoA):
Articles of Association (AoA):
Identity Proof:
Address Proof:
Director Details:
What is a Section 8 Company?
A Section 8 Company is a type of non-profit organization established under Section 8 of the Companies Act, 2013 (previously Section 25 of the Companies Act, 1956) in India. It is formed for promoting charitable purposes such as education, social welfare, healthcare, environmental sustainability, etc.
What are the main objectives of a Section 8 Company?
The primary objectives of a Section 8 Company are to promote charitable activities and social welfare without the intention of making profits. These activities can include education, healthcare, poverty alleviation, environmental conservation, and other similar causes.
Can a Section 8 Company earn profits?
While a Section 8 Company can generate income through its activities, it cannot distribute profits among its members. Any surplus generated must be reinvested in furthering the company's objectives and cannot be distributed as dividends.
What are the benefits of forming a Section 8 Company?
Benefits of forming a Section 8 Company include tax exemptions, limited liability for members, credibility and trustworthiness due to regulatory oversight, flexibility in governance, and the opportunity to contribute to social causes.
Can a Section 8 Company be converted into another type of company?
Yes, a Section 8 Company can be converted into another type of company, such as a private limited company or a public limited company, subject to compliance with the necessary legal procedures and approvals from the concerned authorities.
