In order to promote the religion, charity, commerce, art, science, or any other valuable object, a company can be established after attaining a section 8 license from the central government.
The license is significantly permitted to remove private Limited from the proposed name. Section 8 company is appropriate for non-profit goals. It may be a private or public limited company.
According to the law in case the proposed section 8 company is a private limited then at least 2 persons are must to be promoters and proposed section 8 company is a public limited then at least 7 persons must be the promoters of the company.
A ‘Section 8 Company’ is eligible for some fixed exemptions from provisions of law and a concessional rate of fees.
The establishment procedure of a section 8 company is equivalent to that of any other company registration in India with an additional requirement of a prior license from the central government under section 8 of the companies act, 2013.
Being a Non-profit Organization (NPO) doesn’t mean that the Company can’t generate a profit/income.
It only indicates that the Company can generate income but the promoters aren’t to gain from those profits. The profits can’t be divided among the promoters. All incomes must be taken in use for promoting the object.
However, a few exemptions and advantages have been rendered for NGO or NPO under section 8 of the Companies Act, 2013. Besides, such companies can also relish numerous tax exemptions. Even those who are contributing towards Section 8 Company can claim the Tax Exemption against their donations.
Section 8 Company is a separate legal body, distinct from other companies. It stands out differently from its members. The Company has endless existence alongside having systematic operations and larger flexibility.
While every type of company structure has to pay stamp duty, Section 8 Companies are don’t have to pay the stamp duty on the Memorandum of Association (MoA) and Articles of Association (AoA) of the private or public limited company.
There is no minimum capital demand has been set for a Section 8 Company in India & the capital structure may be modified at any level according to the growth needs of the company. This refers that it can be shaped without any share capital.
The funds essential for running the business operations can be brought later through donations and/or subscriptions from members and the common people.
Section 8 Company doesn’t require to add the suffix Limited or Private Limited after its legal name. It can be registered with names that have words such as Academy, Institute, Club, Charities, Foundation, Association, Society, Council, Federation, and Organisation.
There are numerous tax benefits offered for Section 8 Companies in India.
Section 8 Companies are more trustworthy than all other uniforms of charitable businesses. They’re led by the Companies Act and are regulated stringently.
For instance, the requirement of a compulsory annual audit or the MOA and AOA can’t be modified at any level or condition. The rules on controlling the profits and losses of the company turn these companies reliable.
Those who donate to a Section 8 Company are entitled to avail of tax exemptions under section 12A and 80G of the Income Tax Act.
A registered partnership firm can be a member in its individual capability and acquire Directorship.
Section 8 company procedure becomes smooth and fast when it comes in the hand of AGCC as we offer to support you in every matter of Section 8 company registration. While you can focus on other significant matters of business operations that require your attention, let our proficient team manage the complex process from finishing papers, opting and finding name availability, logo or designing of trademark, registration of trademark, etc.
We’ll uphold you through each and every phase of its establishment. For any sort of queries further, reach out to AGCC.
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