Section 8 Company Registration

Section 8 Company Registration

Section 8 Company Registration

A section 8 company is a firm that is officially registered as an NPO (Non-profit Organisation). It is registered as Not for Profit Company where there is no provision to distribute profit earned. Unlike a public limited company, which divides its profits among the shareholders, an NPO uses the profits (if any) for furthering its objective. The objective of an NPO is usually promotion of education, science, sports, social welfare, research, environmental protection, religion, commerce, arts, and other charitable purposes, Associations, Institutes, Colleges, NGO.

A Section 8 company functions just like a regular company, and it has all the rights and obligations that come with a private limited company. One significant differentiator between both is that the Section 8 Company cannot use the words, “Limited” or “Section 8” in its officially registered name.

Section 8 Companies come under the Companies Act of 2013, which corresponds to the old Section 25 of the Companies Act of 1956. When you register a company under Section 8, you get a certificate of incorporation, authorized by the Central Government of India.

Documents Required For Section 8 Company Registration

  • Digital Signature Certificate
  • Director Identification Number
  • Memorandum of Association
  • Articles of Association
  • ID proofs for members, like Aadhar Card, Passport, Voter ID
  • Passport size Photographs
  • Director’s details (if Members are other Companies / LLPs)
  • Address Proof

Frequently Asked Questions

Who can set up a Section 8 Company?

  • The companies with the objective of promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other objective.
  • Intends to apply its profits, if any, or other income in promoting its objectives and
  • Intends to prohibit the payment of any dividend to its members; can be registered as Section 8 Company.

What registrations are required under Income Tax Act?

Charitable Trusts including Section 8 companies are eligible for tax exemption u/s 11, 12, 12-A, 12-AA, 13 and 80-G of the Income Tax Act. The expression “charitable purpose” has been defined under Section 2(15) of the Act to include:

  • Relief of the Poor
  • Education
  • Medical Relief
  • Advancement of any other object of General Public Utility

Can Section 8 Company Merge with another Company?

Yes. Section 8 companies can amalgamate only with other section 8 company and having similar objectives.