Section 8 company is a company which is licensed under section 8 of companies act, 2013. It is a non-profit organization (NPO) which is formed with the objective to promote commerce, arts, science, sports, education, research etc. The profit of such types of companies are applied towards the furtherance of their cause and no dividend is paid to any of their members. These companies are registered for social welfare, charity and meeting objectives of the organization towards the society at large. Incorporation certificates of such companies are obtained by the central government and are liable to adhere to the rules of the Central Government.
As per the rules, if NPO fails to comply with the responsibilities stated by the Central Government, it may lead to winding up of the company on order of the Central Government. Moreover, strict legal actions will be taken against all the members of the company.
Objective of NPO/Section 8 Company
Primary objective of section 8 company is to work for the welfare of the society in the fields of science, art, sports, education, research, environment protection etc.
Section 8 company Registration: Rules and Regulations
Mandatory Last name to be added to Section 8 company:
Rule 8(7) of companies act describe the words which should be included in section 8 company:
1. Forums It is for social knowledge or social discussion etc
2. Foundations: Mostly suitable for microfinance company, social welfare organization
3. Federation: It is mostly used for schools, clubs, university etc
4. Association: Labour association, Trade association etc
5. Chambers: For promotion of science, arts and trade
6. Confederation: welfare work.
Documents required for Section 8 Company registration: –
1. Passport size photo
2. ID proof of all members of the company
3. List of directors and promoters
4. Address proof of all directors and promoters
5. Rent Agreement (If rented premises)
6. No objection certificate (NOC) from landlord
7. Electricity bill or water bill with property papers (if self-owned property)
Eligibility Criteria for registering Section 8 Company
Statutory Obligation of Section 8 Company
Certain rules and regulations of section 8 company are discussed in the article. Section 8 company is a non-profit organization which is formed for social welfare of the society and for charitable purposes. It is formed with only one aim to provide benefits to the poverty-stricken section of the society. Therefore, there is no sharing of the profits among the directors which is earned by section 8 company by its business operations. It only can be utilized to meet the objective of the section 8 company.