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We provide expert consultancy for company registration, GST, ITR filing, and FSSAI certifications, ensuring seamless legal compliance.
A Section 8 Company is a type of non-profit organization registered under the Companies Act, 2013, in India. It is formed for promoting purposes such as charitable, educational, religious, scientific, social welfare, or environmental activities. The main objective of a Section 8 company is not to make profits but to work for the welfare of society. These companies enjoy certain privileges and exemptions due to their non-profit nature.
Non-Profit Objective: The main purpose of forming a Section 8 company is to promote a particular objective like charity, education, art, research, religion, sports, or environmental protection.
No Profit Distribution: The income and profits generated by the Section 8 company cannot be distributed to its members, directors, or shareholders. Instead, the profits are reinvested in furthering the company’s objectives.
Minimum Members: A Section 8 company requires at least 2 directors and 2 members for registration, with no upper limit on the number of members.
Tax Benefits: Section 8 companies enjoy several tax exemptions and concessions under the Income Tax Act. Donations made to Section 8 companies can also be eligible for tax deductions.
Company Structure: It is structured like a regular company, meaning it can have a Board of Directors, shareholders, and employees. However, the activities focus on social welfare, and the company cannot declare dividends.
Legal Status: It enjoys the status of a limited company (like a private limited company or public limited company) with separate legal identity, but the main goal is public benefit rather than profit generation.
Registration: Section 8 companies are registered with the Registrar of Companies (RoC), and they must apply for a license from the Ministry of Corporate Affairs (MCA) before they can commence operations.
Financial Transparency: A Section 8 company must maintain financial transparency by auditing and submitting annual accounts. The company’s records are also open to the public and government agencies for scrutiny.
Government Oversight: While it enjoys several privileges, it is also under the oversight of the Ministry of Corporate Affairs, which ensures that the non-profit organization operates within the bounds of its objectives.
Tax Exemptions: Section 8 companies can avail of tax exemptions under Section 11 and Section 12 of the Income Tax Act, provided they fulfill the required conditions.
Donor Benefits: Donations made to a Section 8 company are eligible for tax deductions under Section 80G of the Income Tax Act, encouraging people to donate for social causes.
Limited Liability: Like any other company, a Section 8 company offers limited liability protection to its directors and members.
Credibility: Being a registered company, Section 8 companies have more credibility and can attract more support from the public, government, and other organizations.
Perpetual Succession: Section 8 companies enjoy perpetual succession, meaning the company continues to exist even if the members or directors change
Regulatory Compliance: It must adhere to strict regulatory and compliance requirements under the Companies Act, 2013, which can be cumbersome and time-consuming.
Limited Fundraising: Section 8 companies cannot raise funds by issuing shares or dividends, so they rely primarily on donations, grants, and other non-profit sources.
No Dividend Distribution: The company cannot distribute any surplus profits to its members or shareholders
Obtain Digital Signature (DSC): The directors of the company need to get a digital signature for online submission of documents.
Obtain Director Identification Number (DIN): All directors must obtain a DIN.
Apply for License: The company must apply to the Ministry of Corporate Affairs (MCA) for a license under Section 8 of the Companies Act.
Company Name: The proposed name should be in line with the objective of the organization and should be approved by the MCA.
Draft Memorandum and Articles of Association (MOA/AOA): These documents define the objectives and rules of the organization.
Submit Documents: Submit the necessary documents, such as MOA, AOA, identity proof, address proof, and other relevant documents to the RoC for approval.
Certificate of Incorporation: Upon approval, the RoC will issue a Certificate of Incorporation, and the Section 8 company can begin its operations
At TaxHint Advisors, we provide comprehensive services for the registration and compliance of Section 8 companies. Our expert team ensures a hassle-free process, allowing you to focus on your social or charitable goals while we take care of the legalities and paperwork
Our team is well-versed with all legal and regulatory requirements related to Section 8 companies.
We handle all legalities, paperwork, and compliance for you, making the registration process seamless.
We offer competitive and transparent pricing for all our Section 8 company registration services.
From registration to compliance, we offer full support to help your Section 8 company thrive
A Section 8 company is a non-profit organization registered under the Companies Act, 2013, in India. It is formed with the purpose of promoting activities like charity, education, art, religion, research, social welfare, environmental protection, and similar causes.
No, a Section 8 company cannot distribute any profits to its members, directors, or shareholders. The profits must be reinvested into the company to further its non-profit objectives.
A Section 8 company requires a minimum of 2 directors and 2 members. There is no upper limit on the number of members.
Yes, a Section 8 company can raise funds through donations, grants, and crowdfunding. However, it cannot raise funds by issuing shares or distributing profits. It is largely dependent on donations and other charitable funding sources
No, a Section 8 company cannot convert into a profit-making company. If it wants to change its objective, it must first surrender its license and re-register as a different type of company, such as a private limited or public limited company.
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