Formation and Registration of Section-8 Companies

There are 3 legal forms exist for an NGO or Non-Profit Organizations i.e Trusts, Societies and Section 8 Companies. Indian Trusts have no central law; Indian Societies have different legal and institutional frameworks from state to state while Section 8 companies have one uniform law across the country Companies Act, 2013. It is this robust Act that regulates the formation, management and accountability of a Section 8 Company, thus making it more closely regulated and monitored than trusts and societies, and recognized all over the world. A Non-profit Company or Section 8 Company is a Company which:

• Has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
• Intends to apply its profits, if any, or other income in promoting its objects;
• Intends to prohibit the payment of any dividend to its members.

Benefits:

• It has organised operations and greater flexibility.
• Avoids meticulous registration process and no physical presence required.
• No requirement of a minimum paid-up capital.
• Seamless procurement of tax benefits under section 12AA and 80G of the Income Tax Act.
• Any partnership firm can be a member in its individual capacity and obtain Directorship.