A Section 8 company, also known as a Section 8 nonprofit company or a Section 8 organization, is a type of company that is incorporated under Section 8 of the Companies Act, 2013 in India. This section of the law allows for the formation of companies with charitable or nonprofit objectives.
Section 8 companies are established for promoting art, science, commerce, religion, charity, social welfare, sports, education, research, or any other useful object that benefits the public. The primary objective of these companies is not to make a profit but to engage in activities that are for the benefit of society.
Do you have the zeal to do some passionate work for society? Well, you can build your own company and help people in a proper manner as the government does. For that, you need to initiate the Section 8 Company registration process. You can attract people's funds legally into your company after you have done the process.
What is a Section 8 company?
A Section 8 company is a type of organization established in India with the primary objective of promoting social welfare. It does charitable activities and the advancement of useful arts and sciences. The improvement of people's lives is this particular company's main objective, not making money.
These companies are getting regulated under Section 8 of the Companies Act, 2013, and enjoy various benefits including tax exemptions. They are required to reinvest their surplus income back into the organization. Fulfilling the objectives and ensuring that all resources are getting utilized for social causes is the unique aim of these companies.
Need To be Start Section 8 Company?
The stream of opportunities will get explored once the company gets registered as per the respective companies' law. It will enhance the scope of the company and can reach more people. The ways registration is helping these companies are explained here.
Legal Recognition
Registering under the Companies Act provides an NGO with legal recognition as a separate legal entity. This empowers it to enter into contracts with other businesses and own property in its name. The company can undertake activities in its own name to enhance credibility and legitimacy.
Fundraising Opportunities:
This process enables the company to access various fundraising opportunities. The company can apply for grants, donations, and funding from government bodies, and other national & international organizations. Individuals who are more likely to support these entities can send help without any hassle. This highly empowers these companies to carry out their social objectives effectively.
Tax Exemptions
Companies that do social work enjoy tax exemptions on their income heavily. It ensures that more resources are getting utilized for social benefits. These companies do not have to pay income tax on the profit generated from their core activities. Also, donors contributing to these companies are also receiving tax benefits. It encourages people and organizations to support their initiatives for the betterment of people.
Limited Liability
Companies under this Section provide members with limited liability protection. This means that the personal assets of members are safeguarded in case of any legal liabilities or debts incurred by the company. It creates a secure environment for people to engage in society-related work without losing their personal financial well-being.
Enhanced Credibility
Trustworthiness of the company is getting increased because of the registered name. It shows the company's commitment to having the operation transparent, accountable, and adhering to legal and regulatory requirements. This can attract more stakeholders, potential partners, donors, volunteers, and beneficiaries.
Expansion and Collaboration
These companies can establish branches or undertake projects in different locations after getting the registration ID. It will strengthen their impact as well as reach. Collaboration with other nonprofit organizations, government agencies, and corporations becomes easier, enabling synergistic efforts to tackle social challenges.
Register the Section 8 Company online
Of course you can register section 8 company online as per the rules framed out in section 8 of the companies act. For that, you need to visit the portal of the Ministry of Corporate Affairs (MCA) and open the respective tab. Checking the website in detail will give you complete information regarding the process. With that, you need to prepare all the documents you need to submit on the respective portal.
Documents you Needed
To register this company in India, you will need essential documents including identity proof (PAN card, Aadhaar card), address proof, Director Identification Number (DIN), Digital Signature Certificate (DSC), Memorandum of Association (MOA), Articles of Association (AoA), affidavits and declarations, NOC from property owner (if applicable), proof of registered office, consent letters from directors and shareholders.
These documents verify the identity, address, and intention of the company. It is important for you to note that specific requirements may vary in each state in India. Seeking guidance from legal professionals or company registration services can ensure compliance and a smooth process.
Overall, registration empowers a Section 8 company by providing it with legal recognition, access to funding, tax benefits, limited liability protection, credibility, and opportunities for expansion and collaboration. The process empowers the company to fulfill its social objectives more effectively for making a positive impact in society. Section 8 companies combine the spirit of entrepreneurship with a social cause, making a positive impact on society while operating under a non-profit model.