Register a Non-Profit Company

Understanding Section 8 Company:

What is a Section 8 Company?

• Companies registered under Section 8 of the Companies Act, 2013 have a unique purpose: to promote commerce, arts, science, sports, education, research, social welfare, or environmental protection.
• Existing public companies, private companies, or trusts can be converted into Section 8 companies.
• Recognition as a Section 8 Company necessitates a license from the Central Government, with any alteration of its objects requiring prior approval.

Benefits of Section 8 Companies under the Companies Act, 2013

• Distinct Identity: Section 8 companies are legal entities with separate existence from their directors and shareholders, enabling ownership transfer and corporate restructuring.
• Limited Liability: Members' liability is limited, and even partnerships can be admitted as members.
• Tax Benefits: Eligible for registration under sections 80G and 12A of the Income Tax Act, with stamp duty concessions available.
• Establishment of Educational Institutions: Section 8 companies can initiate schools and colleges, and medical colleges were permitted by the Medical Council of India in 2016.
• Exemptions under the Act: Section 8 companies enjoy specific privileges, including relaxed regulations on board meetings, directorship, and constituting committees.
• Corporate Social Responsibility (CSR): Section 8 companies are preferred vehicles for CSR objectives and are eligible implementing agencies under specific conditions.

Requirements for CSR Projects Implementation by Section 8 Companies

• Track record of three years of handling CSR projects is required.
• Registration under Section 12A and Section 80G of the Income Tax Act is mandatory.
• Form CSR-1 filing with MCA and obtaining CSR Registration Number are prerequisites for CSR project handling.

Compliance with CSR Requirements

• Section 8 companies meeting specific financial thresholds are mandated to spend 2% of their average net profits.
• Aligning main objects with CSR objectives is advisable to ensure compliance with CSR provisions.