Section 8 Company Registration

A Section 8 company can be discerned as an organization that is registered as a Non Profit Organization and has a prime objective of the endorsements of arts, commerce, charity, education, protection of environment, science, social welfare, sports, research, religion and aims to pertain its profits, if any, or other income in endorsing its objects. Its operates exactly like a Private Limited Company that is inclusive of all the rights and obligations that come with such a company. However there are differences from a company in one very cardinal aspect i.e the use of the words like “Section 8” or “Limited” are forbidden from its name.

The income of the Company is deployed to endorse only charitable objects and are abdicated from paying any dividend to the members of the company. The central government furnishes an incorporation certificate to all such companies and also notifies them about some restrictions and conditions. In case they fail to fulfil them the central government may also order them to liquidate the company. In case if the fraud objectives of the company are manifested then a legal action will be taken against all officers of the Company.

However A section 8 company has many advantages over the Trust or Society like the enhanced recognition and better legal standing. A Section 8 company undeniably has higher credibility amongst donors, Government departments and other stakeholders.