A Section 8 Company is registered under the Central Government’s Ministry of Corporate Affairs. The objective behind such kind of incorporation of the non-profit making company is to promote science, sports, art, education, research, social welfare, religion, charity and environment protection, etc., where the profit doesn’t play any role. It is, however, important to have the objects with non-profit motive. The life of such kind of company is not dependent on or is related to the life of a particular individual or individuals. It could, however, go on indefinitely until it accomplishes its objective, merges with another business, or it goes bankrupt.
The article will tell us about as to how many members are required for such company. As per the Companies Act, 2013, there is, however, no such restriction regarding the capital which is required to incorporate a company. This limit can, however, be increased at any stage of the business in future as the business grows. But Minimum of two directors is required if it is incorporated as a private limited and minimum of three directors are required if incorporated as a public limited company. Maximum there can be 200 members if it is incorporated as a private limited, but if it is incorporated as public limited then there is no limit as such. The director of the company who is required must be a natural person and should be above 18 years of age. He might or might not be a resident of India. Even the foreign nationals are allowed to be the directors of the Indian Section 8 company.
However, the benefits that are associated with such kind of companies are:-
Forming a Section 8 Company is an easy process
- The Minimum paid-up capital is not required
- It is exempted from Stamp duty registration
- Any of the registered partnership firms can be a member in its individual capacity
- There are Tax deductions benefits u/s 12AA and u/s 80G of Income Tax Act to the donors of the company
- It also has Greater flexibility
For the incorporation of a Section 8 Company, it is important that the directors have a non-profit motive to incorporate a Section 8 company.-
As we look around us, we see that everybody is running behind money. But There exists, however, many institutions at large whose objective is to serve the society and to cater their good quality services with all the best possible efforts in all the areas, especially the remote areas where the government is unable to reach. But being a part of this kind of society, the government also supports such organizations in their best way and also provides all possible assistance.