A section 8 company is a type of company which is registered under the Companies Act, 2013, but unlike any other company the main object of the section 8 companies are promotion of science and commerce, arts, sports, education, research, charity, social welfare, protection of environment and religion or any other such objects.
Unlike any other company, a section 8 company is not allowed to pay the dividend to its members and any income of the company is only allowed to be applied for the promotion of the objects of the company.
A section 8 company is also a type of NGO which functions similar to the trust and societies.
The name of a section 8 company can be chosen without the use of the words private limited or limited as the case may be. Foundation word can be added at the end of the name of the section 8 company.
The credibility of the Section 8 Registered company is higher than the other types of NGO amongst the Government departments, stakeholder and the donors.
The functioning of the Section 8 company is same like Trusts and Societies but the governing acts of the three are different, Trust, Societies and section 8 Companies are governed by Indian Trusts Act, 1882, The Societies Registration Act, 1860 and Companies Act, 2013 respectively.
The registration procedure of a section 8 company is similar to that of any other private/public limited company, the only difference is to file a form for obtaining the section 8 license.
It usually takes one month to register a section 8 company which may extend in certain situations.
The list of documents/information required for Section 8 Company registration is as mentioned below:
- Proposed Name of the company
- Passport photographs, PAN and address proof of all the directors
- Proof of registered office of the company
- Objects of the company
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