Section 8 Company

A Section 8 Company is a type of non-profit organization registered under the Companies Act, 2013. It is formed with the objective of promoting charitable causes such as education, art, science, sports, research, social welfare, religion, or environmental protection. Unlike other companies, a Section 8 Company does not aim to earn profits for its members. Instead, any income or profits earned are used only for advancing its charitable objectives.
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Benefit of Registering Section 8 Company

Tax Benefits

  • Section 8 Companies enjoy various exemptions and benefits under the Income Tax Act.

  • Donations to such companies may also qualify for tax deductions under Section 80G.

Separate Legal Identity

  • The company is a separate legal entity, distinct from its members.
  • It can own property, enter into contracts, and sue or be sued in its own name.

Limited Liability

  • Members have limited liability, meaning their personal assets remain protected.
  • They are only liable to the extent of their shareholding or guarantee.

Credibility & Recognition

  • Section 8 Companies enjoy various exemptions and benefits under the Income Tax Act.

  • Donations to such companies may also qualify for tax deductions under Section 80G.

Separate Legal Identity

  • The company is a separate legal entity, distinct from its members.
  • It can own property, enter into contracts, and sue or be sued in its own name.

Limited Liability

  • Members have limited liability, meaning their personal assets remain protected.
  • They are only liable to the extent of their shareholding or guarantee.

Frequently Asked Questions About Section 8 Company

A Section 8 Company is a non-profit organization registered under the Companies Act, 2013. It is formed to promote charitable objectives like education, social welfare, art, science, culture, research, sports, or environmental protection.

Yes, a Section 8 Company can earn profits, but those profits must be used only for charitable purposes. They cannot be distributed among members or shareholders.

Any individual, group of individuals, or an association who wants to promote charitable activities can register a Section 8 Company.

Credibility and recognition as a registered NGO

Limited liability protection for members

Tax benefits under the Income Tax Act

Eligibility for government grants and foreign funding

Separate legal identity

NGO is a general term for non-profit organizations.

Trusts & Societies are registered under state laws.

Section 8 Companies are registered under the Companies Act, 2013 and enjoy higher credibility, corporate structure, and better compliance benefits.

Yes. A Section 8 Company must have at least 2 directors (Private Limited) or 3 directors (Public Limited).