Section 8 Company

Section 8 Company is a Company which registered Under Companies Act, 2013 with a Non Profit motive.

In India there are Three types of Non-profit Organization (NGO) such as:

Trust

Society

Section 8 Companies

Non-profit Organization (NGO) is an organization which works for non profit/charitable purposes.

The primary purpose of registering a company as a Section 8 Company is to promote non-profit objectives such as trade, commerce, arts, charity, education, religion, environment protection, social welfare, sports research, etc. The profits/incomes of the company if any, are applied towards promoting the objectives of the company and are not distributed as dividends to its shareholders. 

Section 8 Company is the most popular form of Non-profit organization that is established for the-

• Promotion of commerce,
• Art,
• Science,
• Sports,
• Education,
• Research,
• Social welfare,
• Religion,
• Charity,
• Protection of environment or any such other related object”.

As a Private Limited Company Incorporation Sec. 8 Company requires minimum 2 Directors, Minimum 2 shareholders but maximum upto 200 Shareholders and as a Public Limited Company Incorporation Sec. 8 Company requires minimum 3 Directors.

CS Club India helps you to register your Sec 8 Company across India at a very reasonable price. You can register your Company with us in few easy steps. We will provide you facilities at the time of Incorporation. Such as:

• Name Reservation (RUN Application)
• PAN & TAN
• ESI, PF Registration
• Draft of your Company’s constitution (MOA & AOA)
• Certificate of Incorporation
• Share Certificate
• GST Registration Certificate(if any)

Features Of Sec. 8 Companies:

• No requirement of minimum paid-up capital in case of a Section 8 company.
• Minimum 2 Directors require in case of Private Sec. 8 Company
• Minimum 3 Directors require in case of Public Sec. 8 Company
• Main purpose of establishing a  company as a Section 8 company is to promote non-profit objectives
• The profits of Sec. 8 company, if any, are applied towards promoting the objectives of the company and not distributed as dividends to its shareholders
• Prohibit the payment of any dividend to its members.

Benefits of Sec. 8 Companies:

• No requirement of minimum paid-up capital
• Tax Benefits
• Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act.
• Exempt from payment of Stamp Duty
• Separate Legal Entity
• Section 8 Companies are not required to add the suffix Limited or Private Limited at the end of their name.
• More credibility as compared to any other form of a charitable organization.
• Members of Section 8 Company can easily transfer the ownership of the company
• Section 8 Companies are not required to add the suffix Limited or Private Limited at the end of their name.

Sec. 8 Companies Registration Process:

1. Obtain Class 3 DSC for all Proposed Directors

2. Apply for Name Reservation (can apply upto 2 names)

3. Prepare Documents for Incorporation

4. Fill the information in Incorporation Forms (Spice)

5. Attach DSC and submit the forms

6. Got Certificate of Incorporation

7. Got Registered Sec. 8 Company Under Section 80G (optional)

Benefits if the Company gets Registered under Section 80G:

If a section 8 company gets itself registered under section 80G then the individual or entity donating to the Non-profit company will get a deduction of 50% from their taxable income.

As per the Finance, Act 2020, the amendment was made i.e. With effect from first June 2020, All the existing charitable and religious institutions (including NGOs) which are registered or approved under the following sections-

1. Section 12A

2. Section 12AA

3. Section 10(23C)

4. Section 80G

These are compulsorily required to switch to section 12AB for fresh registration in order to continue availing exemption under section 10 or 11.