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SEC 8 COMPANY REGISTRATION

ADVANTAGES & BENEFITS
Why to Register Section 8 Company
Section 8 Company or a Non-Profit organisation (NPO) is a Company established for promoting commerce, art, science, religion, sports, education, research activities, charity or any other useful social object, provided the profits and donations is applied for promoting only the objects of the company and no dividend is paid to its members or owners.
The term No Profit does not mean that the Company cannot generate profit or income, but what it means is applying the income for promotion of the object and not for distributing it to the promoters. It means that the Company can earn profits but the promoters cannot be benefitted out of those profits.
1 Many privileges and exemptions are available to section 8 company under Company Law
2 Exemption from requirement of Minimum Paid-up capital
3 Exemption of Stamp duty for registration
4 Non-application of Companies Auditor's Report Order (CARO)
5 Registered partnership firm can be a member in its own capacity
6 Tax deductions to the donors of the Company u/s. 80G of the Income Tax
MINIMUM REQUIREMENTS
for Section 8 Company Registration
1Minimum 2 Shareholders (for Private Limited NGO) and 7 Shareholders (for Public Limited NGO)2Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.)3The directors and shareholders can be same person4DIN (Director Identification Number) for all the Directors5DSC (Digital Signature Certificate) for all of the Directors6Address proof for proposed office address

 

Reasons to Register a Section 8 Company

Registration

Section 8 Companies are registered under the Companies Act, 2013. Hence, the process for registration and certificate of incorporation for a Section 8 Company is issued by the Ministry of Corporate Affairs, Government of India.

Name

Section 8 Companies can be registered with names that contain words like Association, Foundation, Society, Council, Club, Charities, Institute, Academy, Organisation, Federation, Chamber of Commerce, Development and more.

Management

Trusts are managed by Trustees as per a Trust Deed. Section 8 Company does not have the concept of Trustees. Hence, Section 8 Companies are managed by the Board of Directors based on the MOA and AOA of the Section 8 Company.

Profits

Like a private limited company, a Section 8 Company will also have revenue, expenses, profits and losses. However, in a Section 8 Company the profits can be used only for the charitable or not-for-profit purposes mentioned in the MOA.

Transferability

The management of a Section 8 Company can be easily transferred from one person to another by altering the changing the composition of Board of Directors. Section 8 Company can also be controlled by shareholders.

 

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