- Governing law
- Section 8, Companies Act, 2013 and Rules 19 to 23
- Company name
- No "Limited" or "Not Limited"
- Licence
- Granted with incorporation since 2019
- Profits
- Applied only to the objects, no dividends
A Section 8 company is a corporate entity primarily incorporated for non-profit purposes.
It is one of the options available to pursue charitable and non-profit objects in an organised manner. The others are a charitable society and a charitable trust.
It is called a Section 8 company because the process of incorporation is contained in Section 8 of the Companies Act, 2013. Under the Companies Act, 1956 it was known as a Section 25 company.
Section 8, along with other applicable sections, holds the provisions for incorporation. Rules 19 to 23 of the Companies (Incorporation) Rules, 2013, along with other applicable Rules, also apply.
The process is in many ways similar to that of a private limited company. A Section 8 company adds a few specific requirements, which the process below covers step by step.
Who can form a Section 8 company
An individual or an association of individuals can register one if it holds the intentions on the right. The objectives have to be confirmed to the satisfaction of the Central Government.
Promote a recognised object
The company intends to promote science, commerce, education, art, sports, research, religion, charity, social welfare, protection of the environment or alike.
Reinvest in the objects
It intends to invest its profits and other income for those objects only.
No dividend to members
It does not intend to pay any dividend to its members.
Eligible objectives
From Section 25 to a single-step licence
The licence lets the company drop "Limited" or "Not Limited" from its name. The jurisdictional Regional Director, acting as a representative of the Central Government, grants it.
Section 25 company
Under the Companies Act, 1956, this form of company was known as a Section 25 company.
Section 8 company
The Companies Act, 2013 moved the provisions to Section 8. Obtaining the licence was a separate, time consuming step.
Licence with incorporation
After the 2019 amendments, the MCA grants the licence along with the approval of incorporation itself.
Seven steps from idea to incorporated
Follow the route as it plays, or choose a step to read its detail. This is the indicative flow; our professionals confirm the exact filings for your case.
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