Basically, a company which is registered under several humanitarian entities like – charity, religion, environment protection, promotion of Sports, education, science, commerce, arts etc. are well known as ‘Section 8 Company’.
All the respective activities of the company gain some profits or income which are used to benefit the charitable purpose for which it was formed.
Section 8 of the Companies Act, 2013 enables registration for the charitable company and also allows to enjoy several relaxations and exemptions.
These charitable companies are termed as a non-profit organisation in which the Act does not hinder the company to reap profits but it rather restrains giving away profits among their respective members.
The Non-profit organisations can be run freely by the promoters as the constraints and losses does not create a charge over the individual’s assets of directors or members, hence ensuring limited liabilities to its members.
Under Section 8 Company, one can enjoy several tax and compliance exemptions as it secures unique status which are well defined from other entities.
Under Income Tax Exemption, not only company but a donor can also claim an exemption for the given donations.
Another benefit is that it gets a separate legal entity which enables to own its liabilities and assets on its own, irrespective of the association between its members. Even if any director or member gets changed, the entire system remains unaffected in terms of rights, obligations, assets and liabilities.
However, the company is not labelled as a corporate entity nor a suffix of ‘limited’ or ‘Section 8’ is attached to it, so that the third parties pay attention to the purpose of making this company rather than keeping their eyes on the gained profits.
List of Documents Required
If you want to register your Section 8 Company, following documents are a must for the registration process, namely –
1. Self-attested copy PAN for all subscribers
2. Self-attested copy of Identity Proof like – Voter Id / Driving License / Passport (Any One)
3. Self-attested copy of Mobile Bill / Telephone Bill / Bank Statement latest 2 Months (Any One).
4. Passport Size Photo
5. Email Id
6. Mobile Number
7. Educational Qualifications
8. DIN if already holding Directorship in any company
9. State where the registered office of the company will be situated
10. Proposed Share Holding Pattern
11. Proposed Share Capital Authorised and Paid Up
12. Copy of Electricity Bill as a Proof of Registered Office of the Company.
The Complete Process shall take 7-10 Working Days from the date of the Receipt of all the required documents.