Insights & Research
Adv. Hashim Wafa
Business Lawyer & IPR Attorney
In India, a non-profit organisation can be registered as Trust by executing a Trust deed or as a Society under the Registrar of Societies, or as a non-profit company under Section 8 Company of the Companies Act, 2013. Section 8 companies are similar to Trust or Society except for one factor that is a section 8 company register itself under Central Government’s Ministry of Corporate Affairs. In contrast to, Trust or Societies which gets registered under State Government regulations.
Section 8 company is a company established with the objects of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object’, and apply all its profits and other income for promoting only the objects of the company and do not pay any dividend to its members.
To establish a Section 8 company, one needs to acquire the license and its essential to follow the annual compliances with the Ministry of Corporate Affairs (MCA) for the smooth operation of the company.
II. BASIC CHARACTERISTICS OF A SECTION 8 COMPANY ARE:
III. ADVANTAGES OF SECTION 8 COMPANY
A section 8 company yields an array of benefits, unlike a Society or Trust. Following is the list of advantages for companies registered under Section 8:
IV. DISADVANTAGES OF SECTION 8 COMPANY
Following are the drawbacks that every company registered under Section 8 has to bear:
V. SECTION 8 COMPANY INCORPORATION PROCESS
Private Limited Company and Section 8 company registration procedure are very similar to each other. A minimum of two Directors are required to start a Section 8 company. One of the Director must be an Indian Citizen and Indian Resident - whereas one or more persons acting as Director can be an Indian National or Foreign National. In addition to the required number of persons, a registered office address within India would be required for the Section 8 Company. shall, on application, in the prescribed form, register such person or association of persons as a company under this section.
STEP BY STEP REGISTRATION PROCEDURE:
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