Section 8 Company, according to The Companies Act 2013, is a company which promotes Art, Science, and Commerce, education, Sports, Social Welfare, Research, Charity, Religion, Environment and similar objects. Their income, as well as profit, is supposed to be used for promoting these objects. Section 8 Company, like any other company, has to go through a proper registration procedure. But, it is still quite different in comparison to other companies. Unlike other companies, Section 8 Companies are given certain exemptions and benefits. This partiality is a result of the objective that company follows. Unlike a normal company, Section 8 Company solely works for the betterment of the general public. There are no personal gains except a sense of satisfaction.
These companies do have members and directors, but unlike other companies, they are based more on volunteers and promoters. They, like other companies, are considered to be separate legal entities, however, they are indulged in promoting a product. They are not seen as manufacturers but mere service providers. Their services majorly include creating awareness and helping the public. These companies, unlike others, are generally dependent on donations and not so much on loans. A partnership firm can also become a member of such a company. Any company and firm, except One Person company, can convert itself into a Section 8 Company, again by following a proper procedure as mentioned in The Companies Act.
The name of Section 8 Company is generally different from normal companies. Rather than using private limited or public limited, you will find words like foundation, association, federation, confederation, the council in the Section 8 Company’s name. Section 8 Company is provided with many benefits that are not given to other companies.
Benefits of section 8 company
- Certain exemptions under Company law.
- No minimum paid-up capital required.
- No stamp duty registration is required.
- Certain Tax deduction under The Income Tax Act.
- Objectives in clear accordance with the general public or a targeted crowd which leads to easy donations and loans.
- They are easy to manage and incorporate due to many exemptions and privileges are given to them.
Even with all these benefits, registration is a must. A license is issued after a successful registration. This license is then used to avail many benefits and hence is a necessity.
At last, being a Section 8 Company makes a huge difference. The company’s workings and objectives are way different from any other company. They work solely for the general public and all the income and profits are used to promote their objectives. There is no personal profit included. These companies are way more reliable due to their easy management and effective objectives. We, at LegalRaasta, can help you with Section 8 Company Registration. You can then go for company incorporation, which is way more safe and beneficial for others as well as you.