What is Section 8 Company?
According to the company Act 2013, Section 8 companies are those companies that engaged in charitable work and constantly working toward the welfare of the society, without the intention of getting profit and dividend. The main purpose of these companies is to promote commerce, social welfare programs, arts, science, sports, education, research, social welfare, protection of the environment. Usually, “Section 8 Companies” are established as Pvt Ltd, LLP, or the public, and registered with the Central Government under that Ministry of Corporate Affairs.
Features
No dividend:This means, the member of this company will not receive any dividend. Profits: The income and profit of Section 8 Companies will be utilized for the promotion of the company.
Special license:To start a business, it’s very important for section 8 companies to get a special license from the Central Government.
Not a small company:Section 8 companies are not treated as a small company.
Incorporation under Form INC-29:A Section 8 Company cannot be incorporated by the Form INC-29.
Use of Suffix:These types of companies can’t use the suffix ‘Pvt. Ltd’ or ‘Ltd’ with its name.
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