What is a Section 8 Company ?
- A Section 8 Company is a non-profit organization formed under Section 8 of the Companies Act, 2013. Its primary objective is to promote charitable activities such as commerce, art, science, sports, education, research, social welfare, religion, environmental protection, or other similar objectives. Instead of distributing profits to its members, the income is reinvested to further the company's objectives.
- Key Features of a Section 8 Company :
- Non-Profit Nature : It is formed for promoting charitable objectives and not for making profits.
- No Dividend Distribution : Profits, if any, are reinvested in the company’s activities and not distributed to members.
- Separate Legal Entity : It has its own legal identity, independent of its members.
- Limited Liability : Members’ liability is limited to the amount they contribute.
- Tax Benefits : Eligible for tax exemptions under Sections 12A and 80G of the Income Tax Act.
- Exemptions & Privileges : Enjoys certain exemptions in compliance requirements under the Companies Act.
