Section 8 Company
What is Section 8 ?
The Companies Act defines a Section 8 company as one whose objectives is to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives.
A Company which works towards the objective of social welfare, without any intention to get any kind of profit or dividend can function as a Section 8 company. A Section 8 company is registered under the central government under the Ministry of Corporate Affairs.t can also be registered as Trust and as a Society registered under the provisions of Society Registration Act, 1860.Furthermore, the profits or incomes of the company can be used only for the purpose of promoting the objectives of the company and not distributed as dividends to its shareholders.
Features of Section 8 Company
1. Director : Minimum two directors, at least one Director should be Indian resident.
2. Member: Minimum two shareholders. Note :(Shareholders and Directors can be same).
3. Registered Office Address Proof (Rent agreement if the premises is not owned by the company)
4. Capital : There is no need of a Minimum paid-up Capital.
Advantages / Benefits of Section 8 Company :
1. A partnership firm can become a member of Section 8 Company registered under the Companies Act.
2. Limited Liability.
3. A Section 8 company does not require performing as many legal formalities as a public or private Company.
4. No minimum share capital required.
5. Transferable Ownership.
6. T Separate Legal Entity.
7. Stamp duty registrations are also exempted.
8. Tax benefit.
9. Credibility.
10. Minimum Documentation and formalities for taking loan.
REQUIRED DOCUMENTS :
• Identity Proof
• Permanent Account Number (PAN) Card
• Aadhaar Card / Passport / Driving License / Voter Identity Card
• Passport size Photographs 3 each
• Email id & Contact Number
• Telephone Bill / Mobile Bill
• Electricity Bill / Water Bill
• Bank Statement /Bank Passbook with latest transaction (Any one of the Document not older than 2 months)
FAQS
As per the Companies (Incorporation) Rules, 2014, only a company with limited liabilities can be registered under the Act.
Yes. As per rule 8(7) of the Companies (Incorporation) Rules, 2014, for the Companies under Section 8 of the Act, the name shall include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc.
Yes, an NRI or Foreign National can be a partner in the Section 8 Company.
Yes. A registered Sec 8 Entity under the Companies Act, 2013, can be a holding identity of another company and if needed, can promote the company as well.
No. Following the legal directives of the Company (Incorporation) Rules, 2014 of the Indian Govt. a One Person Company (OPC) cannot become a member or be associated with a Sec. 8 company.