Section 8 Company

What defines Section 8 Company?

There are various ways to do the social welfare activities. Generally social welfare activities are being done under any registered organisation. Such organisation can be Registered Trust, Registered Society or Company Registered u/s 8 of company Act.

If an organisation following characterise then such organisation will be called as Social Welfare Organisation or Non Profit Organisation and will be eligible for Registration u/s 8 of Company Act:

  • Conducting activities for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any other similar activities
  • Income and profit of such organisation will be utilised for object prescribed in memorandum of association (MOA) i.e. Charitable or religious objects
  • Such organisation cannot distribute dividend

Key Characteristics of Section 8 Company:

  • It’s a Separate Legal Entity and purpose of running such company is not to earn profit
  • Such company works for religious and charitable purpose
  • Such company is governed by special provisions as mentioned section 8 of company act
  • There are certain relaxations are being provided to section 8 company like appointment of company secretary, 21 days clear notice of AGM and holding of 4 board meetings etc.


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Key Advantages of Section 8 Company:

Tax Benefit:
Section 8 company can avail tax benefit which is prescribed u/s 12AA of Income Tax Act. If Section 8 Company opt for exemption u/s 12AA then section 8 company will not be required to pay taxes.
No requirement of minimum capital:
Section 8 Company is not required to maintain any minimum paid up capital
Stamp Duty Waiver:
Section 8 Company is not required to pay stamp duty on share capital.
Credibility:

Section 8 company has increase brand value and credibility as promoter of section 8 Company cannot withdraw profit from company

Registration Process for Section 8 Company:

Registration Process of Section 8 Company is almost same as other private limited company. Please refer our Registration of Private Limited page to know the same.

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