Which Companies are Known as Section 8 Companies?

Which companies are known as Section 8 Companies?

A company is known as a Section 8 company when registered as a Non-Profit Organisation or a Non-Governmental Organisation with a motive of promoting art, culture, technology, science, commerce, education, charity etc. and intends to use its profits for the welfare purposes only.

There are various Section 8 companies in India, you can also read the List of Top 10 Section 8 companies in India. 

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Which companies are called Section 8 Companies?

All those companies which have Non-profit motives and work for the welfare of others in various streams such as Art, culture, science, technology, commerce, education etc are known as Section 8 companies. The profits in a section 8 company cannot be utilised by its members, it has to be used for the business purposes only.

Examples of Section 8 Companies

Some examples of Section 8 Companies are Infosys Foundation, Reliance Foundation, Tata Foundation, Reliance Research Institute, FICCI, CII, Pratham Education Foundation, India International Trade Centre etc. These companies are registered under Section 8 of the Companies Act, 2013.

If you want to get your section 8 company incorporated, you can reach out to our team for legal support. These companies use their profits for welfare purposes and do not share it among the shareholders.

How to form a Section 8 Company?

As per the rules declared under the Companies Act, 2013, to register a Section 8 company you can submit all the required documents and required fees on the MCA portal. If all your documents are accepted by the concerned ministry, you can get your Section 8 company incorporated within 7-10 working days.

There is a very complicated process which involves filing various forms with the Registrar of the company such filing for DSC, and various other forms.

Apart from this you need to also check for the name availability for your section 8 company and there are certain limitations to it you cannot add suffixes such as Pvt Ltd, Ltd, or Public ltd for a Section 8 company. You can only add terms like foundation, federation, council etc.

Contact Us to get your Dream company incorporated at the lowest Cost starting at Just Rs 4,999 including Govt and professional Fees.

Advantages of Section 8 Company

  • A Section 8 company enjoys limited liability which means they are liable to pay for the losses in the company upto their shared capital in the company.
  • A section 8 company gets various tax exemptions such as Income Tax exemption.
  • A Section 8 company is a separate legal entity from its members.
  • A section 8 company also enjoys immunity from various compliances and procedure checks every year.
  • A section 8 company has more credibility than an NGO, Society or trust.
  • There is no minimum capital requirement for a Section 8 company incorporation.

Disadvantages of a Section 8 Company

  • In such companies members are not liable to share profits in the company.
  • Dividends are not paid to the members and directors of the company.
  • Profits can only be used for further charitable goals.
  • The license of a Section 8 company is revocable for a variety of reasons. 

Closure of a Section 8 company

A Section 8 company can be dissolved voluntarily by its members based on the directives issued by the Government of India. If any assets remain after settling all the debts and liabilities, it must be transferred to a similar organisation in the winding-up process. The assets can also be solved and all the money will be transferred to the Insolvency and Bankruptcy fund.

Conclusion

A section 8 company is developed with a special purpose of driving and working with the government and helping the activities of the government by assisting in welfare activities and using the profits of the company in further welfare activities in the country.

To register your Section 8 company, you can always reach out to us and our Team at Professional utilities will help you get your company incorporated at the lowest fees within 7-10 working days.

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