| Company Details | |
| Act | No specified Act |
| Registration Requirement | No |
| Number of members | Only 1 |
| Separate Legal Entity | No |
| Liability Protection | Unlimited |
| Statutory Audit | Not mandatory |
| Ownership Transferability | No |
| Uninterrupted Existence | No |
| Foreign Participation | Not Allowed |
| Tax Rates | Low |
| Statutory Compliances | Less |
Section 8 company means a company registered for Social causes such as the promotion of arts, commerce, science, education, sports, protection of the environment, religion, charity, etc.
By promoting it as a not-for-profit organization, the Act does not bar the company from profit creation but rather prohibits distributing profit among members. This says that all the income or profit from any activity of the company must be utilized towards the charitable purpose for which it is registered.
The company is registered under Section 8 of the Companies Act, 2013, which provides it special status due to its objects. Compared to other types of companies, Section 8 company enjoys various exemptions and relaxations.
With its registration under Section 8 of Companies Act, it obtains a special status – distinct from other entities. Not only the company enjoys tax exemptions, but also the donors can claim an exemption for the donation made (under Income Tax). Apart from tax exemption, the company is also exempted from the applicability of many compliance-related provisions.
Being registered as a company, it obtains a separate identity apart from its members. Therefore, it can own and hold the assets and liabilities in its own name irrespective of the connection with the members. The change in members or the directors neither affects its existence or the assets & liabilities or rights & obligations.
A company registered under Section 8 ensures limited liability to its members. The liability of the members is limited only to the extent of the capital subscribed and unpaid. The losses and obligations do not create a charge over the personal properties of members or directors. This helps the promoters to freely run the non-profit organisations.
Although the company enjoys the benefit of the corporate entity, it is not labelled as the corporate entity. The company does not need to add the suffix “Private Limited” or “Limited” after its name. This exemption is provided so that third parties offer their attention to the company’s purpose and not its status assuming it is profit making organisation.
There is no prescribed limit over section 8 companies for the minimum capital requirement unlike other entities such as public or private limited, but the capital structure can be altered at any stage as required for the growth of the company.
A section 8 Company is exempted for the payment of stamp duty applicable for registration as applicable in the case of other structures such as private limited or a public limited company.
PAN Card of shareholders and Directors.
Foreign nationals must provide a valid passport.
Latest Passport size photograph of Shareholders and Directors
Voter ID/ Passport/ Driving License of Shareholders and Directors
Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors
Electricity Bill/ Telephone Bill of the registered office address in India
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement of the registered office should be provided, if any
Estimated Statement of Income & Expenditure for next three years
Mainly it builds the company brand and preferably be a coined word
Second part of name should suggest the business activity of the company
Its name must include suffix like Foundation, Forum, Federation, Chambers, Association, Council, etc.
The name does not require to add any suffix like “Private Limited” or “Limited”
What are the minimum requirements to register a charitable company in India?
To register such company, the promoters have to ensure the following:
1) The main object of the company must be to operate for a charitable purpose and among those prescribed in law
2) Minimum 2 members of the company, who shall subscribe to capital on incorporations
3) Minimum 2 directors in the company, one of which must be Indian citizen and resident
4) The registered office of the company must be situated in India
What is the minimum capital required?
How to reserve the name of company?
How to obtain approval of Central Government for non-profit company registration?
Whether physical presence of the promoters is required while registration?
Can NRIs/Foreign Nationals be a Director in a Section 8 company?
Whether Section 8 company and NGO registrations are same?
Can section 8 or Charitable company declare dividends?
What is the validity of the registration of Section 8 company?
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