Section 8 Company is a Company that is licensed under Section 8 of the Companies Act, 2013, before this the act was known as known Section 25 Company under the Companies Act, 1956.
The main objectives were:
- In promoting art, commerce, sports, science, education, social welfare, religion, charity, research or protection of the environment
- The profit gained should only be used to promote the activities of the organization or to achieve the objectives of the organization
- No part of the profit is paid to its members.
Therefore, Section 8 Company is a company that is only registered for charity purposes or for the organization’s objectives towards the society.
Furthermore, Section 8 Company is somewhat similar to a Trust or Society, the only exception is that a Section 8 Company is registered under the Central Government’s “Ministry of Corporate Affairs (MCA)” and on the other hand, the Trusts and Societies are registered under State Government rules and regulation.
Advantages of Section 8 Company
The benefits enjoyed by a Section 8 Company are as follows:
- Many privileges and exemptions under the Company Laws.
- Exemption from stamp duty for registration
- Tax deduction to the donors of the company
- These companies can be formed without share capital, the funds are brought in the form of donations
- The shares of the company can be transferred easily
- These companies exempt from keeping any titles or suffix.
Section 8 Company Registration through LegalRaasta:
To register a company under Section 8 Company you need to just follow these steps:
- Fill a simple form available on the official site of LegalRaasta.
- Obtain Digital signatures (DSC) and Director Identification Number (DIN) within 3 working days.
- Apply for license and obtain Certificate of Incorporation (COI) and then apply for Tax Deduction Account Number (TAN) and Permanent Account Number (PAN)
- Registration is complete under Section 8 Company. Your TAN and Pan will be sent through courier.
- ID proofs for members of the Company
- Address proof of the members
- Passport size photos
- Copy of rent agreement (if rented only)
- Copy of property papers (if any)
- Copy of water or electricity bills
- Landlord NOC
- The objective should be to promote science, education, sports etc
- All the revenue gained should be used for the company’s development only
- No distribution of profits amongst members of the company
- The revenue of the company shall only be applied for the promotion of the main objective
- Sharing the profit with the promoters is strictly prohibited
- The company registered under Section 8 of the company shall not alter the provisions of its memorandum or articles except the previous approved by the Central Government
- The income tax rates are applicable at the same rates as they applicable to other companies
- No member of the company should be appointed as a remunerated officer
- No incentives