What is a Section 8 company?
A Section 8 Company means a business entity associated with a Non Profit organization. Unlike other business entities, the purpose of a Section 8 company is not to generate profit.
What is the purpose of setting up a Section 8 company?
The purpose of a Section 8 company is to promote charitable causes that involve science, culture, education, religion etc. Accordingly, the profits earn by an NGO Company (Section 8 Company) are directe towards these purposes, not paid as dividends among its members.
Why is the company categorized as Section 8?
As a business entity, a Section 8 Company Registration is done under the Companies Act 2013. Simply put, it is a company under section 8 of the Companies Act. Being a company registered under section 8 has many benefits that only come into the picture once you start the incorporation process.
Section 8 Company registration
The registration of a Section 8 Company is a process to incorporate a company under the Companies Act, 2018.
Some popular examples of a Section 8 Company are:
- Federation of Indian Chambers of Commerce and Industry
- Confederation of Indian industries
- Give India
These are some of the names in the section 8 company list that make it worthwhile to acquire the Certificate of Registration.
The incorporation register under Section 8 of the Companies Act 2013 is often destin to assist India in moving forward.
NGOs v/s Section 8 Companies
Section 8 companies are NGOs under the guise of companies whose objective is to help as many people as possible. Therefore, after the company incorporation, its structure would feel similar to an NGO, a trust or a Society. However, unlike the Society Registration, the NGO Registration, i.e. the regulations of the Companies Act dictates the formation of Section 8 Company. Therefore, it is the MCA that is responsible for the formation of this type of company. Read More; Nidhi Company Registration
Benefits of registering a Section 8 Company
The MCA associates several benefits with incorporating a Section 8 Company, and they are as follows. You can also consider them as Section 8 Company features:
There are several exemptions that the company Law. This is one of the business section 8 company benefits.
No minimum paid-up capital
The MCA requires no minimum paid-up capital from the company. Therefore, you can guess one of the benefits of section 8 company is that you can set it up even if you don’t have money.
Promoting social welfare
Section 8 company objectives must be to promote social welfare activities. Furthermore, keep in mind that there are no directives of a state. Thus, the rules of NGO registration in Delhi are the same as everywhere else in India.
- There is no requirement for stamp duty.
- Also, under the Income Tax Act, MCA gives certain tax deductions to the Section 8 company.
- A section 8 company has clear objectives that allow them to gather donations quickly.
- The MCA associates several privileges to the company so that It becomes easily manageable.
- As this entity is a company, a section 8 company minimum member count is two directors and two shareholders. Therefore, it is an essential infrastructural aspect you must fulfil to get NGO registration under section 8.