Start Section 8 Comapany
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A Section 8 Company is a Non-Profit Organization (NPO) which
is established to promote art, science, commerce, religion, charity, education, protection of the
environment, social welfare, sports, research or any other advantageous object i.e. for charitable
or not for profit purposes. The profits derived from such promotion cannot be used by the members
but can only be utilized to support and promote the objectives of the company. No dividend is paid
to its members from the income earned.
The central government provides an incorporation certificate to all such companies and also informs
them about some restrictions and conditions. Legal Suvidha Providers expert will help throughout the
whole process of incorporation by giving expert advice as well at every step. Before opting for a
Section 8 Company following points must be kept in mind:
• Section 8 company is similar to Trusts & societies. But trusts & societies are registered under
state regulations. Section 8 companies have various advantages over trusts & societies in terms of
improved recognition & better legal standing, higher credibility in the market, etc.
• A section 8 company works as a limited company but it cannot use the word ‘limited’ in its
name.
• In case they don’t fulfill them, the central government may also order them to wind up the
company.
• In case the fraud objectives of the Company are proved, legal action will be taken against all
officers of the Company.
| PRIVILEGES AND EXEMPTIONS FROM GOVERNMENT | Many privileges and exemptions are available to section 8 company under Company Law. |
| CREDIBILITY | Section 8 company enjoys more credibility as compared to any other non-profit organization be it a trust or a society due to more stringent regulations regarding functioning paints a more reliable picture. |
| NO TITLE TO BE SUFFIXED | Unlike Private Limited or Public Limited Company, there is no requirement of suffixing any title like Pvt. Ltd., etc. next to its name. |
| NAME OPTIONS | Section 8 Company can be registered with names containing words like Association, Foundation, Club, Charities, Foundations, Organisation, etc. |
| TRANSFERABILITY | Another advantage of Section 8 Company is that the management can be transferred easily by just altering the composition of the Board of Directors. |
| NO MINIMUM CAPITAL | Section 8 Companies are exempted from the requirement of Minimum Paid-up capital |
| NO STAMP DUTY | Section 8 Companies are not required to pay any Stamp duty for registration |
| DEDUCTION UNDER SECTION 80G TO DONORS | Donors of the Company is entitled to tax deduction u/s. 80G of the Income Tax Act. |
| EASE OF FORMATION | Section 8 company can be formed by two persons only, by complying with the prescribed formalities of the Companies Act. Many privileges and exemptions are provided under Company Law. A registered partnership firm can be a member of its capacity. |
| LIMITED LIABILITY | The greatest benefit of Section 8 Company is a limited liability. If any liability arises then its member is not personally affected; members are only liable for unpaid shares held by them and not more than that. Being the biggest advantage of this type of company, it means that the owners are not personally responsible for business debts and obligations of the incorporation. |
| SEPARATE LEGAL ENTITY | This is the most prominent quality of a Section 8 Company. It refers to the statement that the company and its members are completely distinctive. The biggest advantage of a section 8 company is that its identity is distinct from that of its members. A company is a separate person having its rights & Obligations. |
| GREATER FLEXIBILITY | A Section 8 company is required to perform lesser legal formalities as compared to a public company. It enjoys special exemptions and privileges under the company law. |
| PERPETUAL SUCCESSION | Death, insolvency and insanity, etc of any of the members does not affect the continuity of the company. Thus the life of the company does not depend upon the life of its members. In the case of the death of the owner or transfer of shares, your business won’t get affected. |
| TAX BENEFITS | A Section 8 company is not required to publish its accounts or file several documents. Therefore, it is in a better position than a public company to maintain business secrets. |
1. ID proof for members
2. Address Proof
3. Passport size Photographs
4. Copy of Rent agreement(If rented property)
5. Electricity/ Water bill (Business Place)
6. Copy of Property papers (If owned property)
7. NOC of Landowner
8. Director’s Directorship details (in other Companies/LLPs, if any)
| Private Limited Company | Limited Liability Partnership | One Person Company | Partnership Firm | |
| Preferred for | Start-ups | Professional Services Firms | Sole Proprietors | Small-medium sized businesses |
| Limited Liability Protection | Yes | Yes | Yes | No |
| Minimum Requirement | 2 Shareholders | 2 Designated Partners | 1 Director 1 Nominee |
2 Partners |
| Fund Raising Options | High | Low | Low | Low |
| Tax Advantage | Few | Most | Few | Minimal |
| Statutory Compliance's | High | Low | High | Minimal |
| Compliance Cost | High | Medium | Medium | Low |
| Get Started >> | Get Started >> | Get Started >> | Get Started >> |
Excellent service and has been very timely in response. They are very patient too and guided us with the right steps even though we approached them with very few days left before the deadline. I highly recommend them to other startups who need legal advice and do all the paperwork at the year-end. And we would approach them for all our future requirements as well.
Vijaya, Employee
Great services and expertise. Highly recommended, Quick work and provided good support for the entire process. Made things very easier for us and I got my first ever Trademark for my product in just no time. I recommend their services to all the Startups for a hassle-free registration and other services. Again Thank You So Much Team Legal Suvidha... Good work...
Rajesh Srivastava, Startup CEO
We highly recommend them. Best in class services. Thank you for helping me through the process and for prompt replies. All the Best in your Endeavors. We highly recommend them. Best in class services. Thank you for helping me through the process and for prompt replies. All the Best in your Endeavors. I will surely consider them for future work.
Krish Mundarath, Businessman
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