Features of Section 8 Company | Non-Profit Company Features

What are the features of Section 8 Company?

Among all the available types of companies in India, a section 8 company is the one which is establish to work for the social and charitable causes in the society and promote the welfare of others. A section 8 company can be registered as an NGO or a society which will support various charitable activities concerned.

Section 8 Company, also known as a non-profit organization or a non-governmental organization (NGO), is a type of company registered under the Companies Act, 2013 in India. The main objective of a Section 8 company is to promote charitable or social causes such as education, poverty alleviation, health, or environmental sustainability. 

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Some important Features of a Section 8 Company

A Section 8 company is different from other companies in many ways and here are some of the key features of a Section 8 company:

  1. Non-profit motive: 

A Section 8 company must have a non-profit motive, which means that its primary objective is not to make a profit but to promote charitable or social causes. The profits earned by the company must be used for promoting its objectives and cannot be distributed among its members.

  1. Limited liability: 

Just like any other company, a Section 8 company has limited liability. The liability of its members is limited to the extent of their shareholding in the company.

  1. No minimum capital requirement: 

There is no minimum capital requirement for registering a Section 8 company. However, the company must have sufficient funds to carry out its objectives.

  1. Name of the company: 

The name of a Section 8 company must end with the words “Foundation”, “Association”, “Society”, “Council”, “Charity”, “Institute”, “Organization”, “Trust”, or “Academy”.

  1. Registration process: 

The registration process for a Section 8 company is similar to that of any other company. The company must have a minimum of two directors and must file the necessary documents with the Registrar of Companies (ROC).

  1. Tax benefits: 

A Section 8 company is eligible for tax benefits under Section 80G of the Income Tax Act. Donations made to such companies are eligible for tax deductions.

  1. Annual compliance: 

A Section 8 company must comply with the annual filing requirements of the Companies Act. It must file its annual returns and financial statements with the ROC.

  1. Governance: 

A Section 8 company must have a governing body that manages its affairs. The governing body is responsible for ensuring that the company operates in accordance with its objectives and complies with all applicable laws and regulations.

  1. Dissolution: 

If a Section 8 company wishes to dissolve or wind up its operations, it must follow the procedure prescribed under the Companies Act. The assets of the company must be transferred to another non-profit organization with similar objectives.

Hope you got to know all the key features of a section 8 company as mentioned above.

Formation of a Section 8 Company

Before you begin working on setting up your Non-profit company, you need to know how to form a section 8 company. So we will describe a brief about the formation of a section 8 company. You can register a section 8 company either as an individual or as a group.

To register a section 8 company you need to follow certain rules and regulations which are required to be fulfilled as per the needs of the Ministry of corporate Affairs(MCA).

While obtaining or planning for a name of your section 8 company you need to have a unique name which is not registered anywhere and you need to take special care about naming a section 8 company. You cannot include words like private limited, limited and public limited in a section 8 company, the words that can be included are foundation, council, federation etc.

Section 8 Company Documents Requirement and Fees

To register your section 8 company you need to submit proof of identity of the directors, address proof of the business,MOA, AoA and some other documents which can be created easily with the help of a professional. The section 8 company registration fee starts at Rs 4,999 which includes Government fee as well as Professional fee of Professional Utilities.

Conclusion

In summary, a Section 8 company is a non-profit organization that is registered under the Companies Act, 2013 in India. There are various features of a section 8 company such as limited liability, non-profit motive, tax benefits, etc. if you are planning to register your section 8 company, you can take help from our professional team at Professional Utilities, and we will register your section 8 company in around 7-10 working days and with a minimum cost starting at Rs 4,999*.

Contact us for more Information by filling in the contact form.

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FAQS on Features of Section 8 Company

Q1. What are the key features of a section 8 company?

The key features of a section 8 company are Non-profit motive, tax benefits, annual compliance benefits, annual return filing, dissolution procedure, limited liability, etc.

Q2. What are the key features of a Section 8 company as an NGO?

A section 8 company can be registered as an NGO which has multiple features such as promoting the welfare of others, doing business that facilitates empowerment and providing help to others.

Q3. Can a Section 8 Company do business?

Yes, a section 8 company can do business provided it does not utilize its profits for personal use or sharing among members. Its profits can only be utilised either in the business or providing benefit to the society. 

Q4. How to start a section 8 Company?

To start a section 8 company you need to Submit certain documents and identity proofs on the MCA portal and to do this you may require legal help for which you can always rely on Professional Utilities for Registration and Documentation process.