Section 8 Company (NGO) Registration
A Section 8 Company is a non-profit organization (NGO) that aims to promote charitable activities, art, science, education, and sports. The profits of such companies are utilized for promoting these objectives and are not distributed among the Company's members. The Companies Act defines a Section 8 company as one whose objectives is to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives.
Benefits of a Section 8 company (NGO)
Section 8 companies in India have several benefits, including...
- Tax exemptions: Section 8 companies are exempt from paying tax on income generated from charitable activities. Donors to Section 8 companies are also eligible for tax benefits under Section 80G of the Income Tax Act.
- Minimal share capital: Section 8 companies do not require a minimum paid-up share capital.
- Limited liability: Members of Section 8 companies are only allotted a limited liability.
- Non-profit objective: Section 8 companies promote healthcare, education, social, urban, and rural empowerment on a non-profit basis.
- Easy to raise funds: Section 8 companies are easy to raise funds.
- Perpetual existence: Section 8 companies have perpetual existence.
Some examples of Section 8 companies include: Reliance Foundation, Tata Foundation
Other benefits of Section 8 companies include:
- Zero stamp duty
- Separate legal entity
- Improved credibility
- Eligibility for grants
- Exempted from any name
- Eligible for foreign contribution
- Profit distribution is not permissible
The minimum requirements for a Section 8 company
- The minimum requirements for a Section 8 company in India are:
- Stockholders: At least two stockholders are required.
- Directors: At least two directors are required. Stockholders and directors can be the same person. At least one director must be an Indian resident.
- Members: A minimum of two members are required. There is no maximum limit on the number of members. Members can be individuals or entities.
- Capital: There is no minimum capital required.
- Audit: An annual audit of the company's financial statements is mandatory.
- Income tax return: Section 8 companies are required to file an income tax return (ITR) annually.
Required documents to register a Section 8 company
- PAN card of the directors and shareholders
- Aadhaar card
- Latest bank statement
- Telephone bill or electricity bill
- Voter ID or passport or driving license
The company's name must be unique and must not be similar to any other registered company or trademark. The company's name must include words like Foundation, Forum, Association, Chambers, or council.
More Registration Required after Company (NGO) Incorporation:
- 12A & 80G Registration
- NGO Darpan Registration
- Trademark Registration
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