A Section 8 Company is such whose basic objective is“Charitable”and “Non-Profit Objectives”. Such entities are referred to as Section 8 Company because they get recognition under Section 8 of Companies Act, 2013.
Section 8 Companies devote all their income and profits towards the furtherance of their objectives
The objective of Section 8 is promotion in the field of Arts, Commerce, science,research,education,sports,charity,socialwelfare, religion,environment protection or other similar objectives.
These Companies apply their profits for the furtherance of their objectives and do not pay any dividend to its members.
The most popular instances of Section 8 Companies include Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industires (CII).
The basic purpose of this company is facilitating the growth of trade and Commerce of India.
Section 8 Company are exempted from the provisions of Income Tax.
They avail benefits u/s 80G of Income Tax Act,1961
Unlike other Companies like private,public,or one person the Companies registered under section 8 does not require much Share Capital
CARO not applicable
The other Companies who have to use the title as “limited Company”, section 8 of the Company is not require to use any suffix or title
The Normal limited or Private Limited Companies are not allowed to transfer the title/ownership but as per Section 8 of Income Tax Act,1961allows the transfer of title/ownership with movable or immovable interest with no hurdles
An application can be made to Registrar of Companies by person or association of persons using requisite forms to form a company with charitable objectives under Section 8 of Companies Act, 2013.
If it is precise and if the Central Government is satisfied it can accept such an application upon the specified terms and conditions imposed under the license granted by it. Once accepted, the Register of Companies will register the Company and issue the license in INC-16 after the necessary verifications and payment of requisite fees.
The Central Government may, by license issue in prescribed manner allow that person or association of person to be registered as a limited company.
License under Section 8 for new companies with charitable companies in Form INC-12
In Form Inc-12 following are the documents to be attached:
INC-13:Memorandum of Association
INC-14:Declaration by Professional
INC-15:Declaration by person in case of Section 8 Companies
INC-16:License to operate as Company
At the end of Section 8 companies can include the word Foundation, Association, Federation, Chambers and Council etc.
It is necessary to note that such Companies can only be limited companies.
Ask us anything, we would definitely answer!
Yes, various tax exemptions are provided to Section 8 Companies, specifically to the donors who are contributing to Section 8 Companies, they can claim the tax exemption against the donation they made to a Section 8 company.
There is no provision for conversion of a trust into a Company. You will have to register Section 8 Company and then perhaps transfer assets of the trust to the company by agreement.
Yes,there is no bar to draw a salary for directors.
Any person who desires to have the main object as promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object can form Section 8 Company.
A person or Association of person who wants to convert Private Company to Section 8, one has to file e-form RD-1 to Registrar of Companies along with prescribed fees to the registrar to grant a license under the Section 8 of Companies Act 2013