A Section-8 Company, also known as a Non-Profit Organization (NPO), is a type of company registered under Section 8 of the Companies Act, 2013 in India. The primary objective of a Section-8 Company is to promote charitable or non-profit activities for the promotion of arts, science, education, religion, social welfare, or any other useful object.
Unlike other companies, the primary focus of a Section-8 Company is not profit-making but working for the betterment of society. These companies are prohibited from distributing dividends to their members and must reinvest their surplus income into the company’s objectives.
To register a Section-8 Company, the company must apply to the Registrar of Companies (ROC) and provide necessary documents and information, including a Memorandum of Association and Articles of Association. The registration process involves strict compliance with the regulations and requirements of the Companies Act, including obtaining necessary approvals and licenses.
Section-8 Companies enjoy certain benefits, such as tax exemptions and access to funding from various governmental and non-governmental organizations. They play a crucial role in social development and have the ability to attract donations and grants from individuals and institutions willing to support their cause.
Section-8 Companies are governed by the provisions of the Companies Act, and their operations are subject to scrutiny by regulatory authorities to ensure transparency and accountability in their functioning.