A Section 8 Company is a type of non-profit organization in India that operates for promoting charitable activities such as education, social welfare, art, science, or environmental protection. Section 8 companies are regulated under the Companies Act, 2013 and are distinct because they do not distribute profits to their members. Instead, profits are reinvested to advance the company’s objectives.
Key Features of a Section 8 Company
1.Non-Profit Motive: Unlike other companies, Section 8 companies cannot declare dividends. Their primary goal is to serve the public through charitable work.
2.Legal Entity: Section 8 companies are treated as separate legal entities. They can contract, own assets, and be sued.
3.Tax Benefits: These companies can apply for tax exemptions under Section 12AA and 80G of the Income Tax Act, 1961, which benefits both the organization and its donors.
Registration Process
To register a Section 8 company, you must follow these steps:
1.Obtain Digital Signatures (DSC) for proposed directors.
2.Apply for a Director Identification Number (DIN).
3.Name Approval: Choose a name aligned with the organization’s objectives.
4.Apply to the Registrar of Companies (RoC), along with the Memorandum of Association (MoA) and Articles of Association (AoA).
5.Upon approval, the Certificate of Incorporation is issued.
Section 8 company registration is ideal for individuals or groups aiming to promote charitable activities in a structured, legally recognized manner. The process grants legal recognition, tax benefits, and credibility, ensuring efficient operation toward philanthropic goals.