FAQs on Section 8 Company

Q. For which purposes the section 8 company can be registered?

By Paras Mehra 11 Feb 2017

Section 8 company can be registered for many social factors like-Education, Poverty, Disease,Blood bank, Environment protection, Other objects for general public utility.

Tags SECTION 8 COMPANY

Q. How to Select Name for Section 8 Company?

By Paras Mehra 10 Feb 2017

Section 8 company is the nonprofit organization which aims to work on the social matters of the society. Further, a section 8 company does not need to end the company name with the word “limited” or “private limited.” The names under section 8 companies may end with “foundation” “cry” or you may choose any other word.The first word under section 8 company should be your brand or the name which you want to use in your NGO like PlantinIndia, being human etc.Important Point: The new company name should not match the existing company or any existing trademark in India.

Tags SECTION 8 COMPANY

Q. Why it is called a Section 8 Company with examples? What is the difference between Section 25 Company registration and Section 8 Company registration?

By Paras Mehra 10 Feb 2017

A NGO registered as a company under Companies Act, 2013 is known as section 8 Company. It is called section 8 company because the provisions relating to registration of this type of company is mentioned in section 8 of the Companies Act, 2013. Section 25 Company is the old name of Section 8 Company. Earlier, before enactment of Companies Act, 2013, company law was governed by Companies Act, 1956. Under the Companies, act 1956 the law relating to NGO registration was mentioned in section 25 of the companies act, 1956 and hence earlier it was also called the Section 25 Company in India.

Tags SECTION 8 COMPANY

Q. What other licenses are required for section 8 company to claim tax exemption?

By Paras Mehra 10 Feb 2017

Section 8 company registration is the first step to start your NPO/NGO in India. It does not provide you any tax exemption. Tax exemption is given by Income Tax Act, 1961. The two important registration required for tax exemption are as follows: - Section 12AA Registration to exempt the income of the Company: To claim any exemption under the income tax act, you need to register under the section 12AA registration. Once registered, you need to comply with the provisions to avoid any scrutiny by the tax department, Section 80G Registration to provide exemption to the donors: This is a one step ahead registration. If you are registered under section 80G, then any person donating to your company can also claim the exemption in his IT return, FCRA Registration: In case you want to claim the donations from the foreign country, then you need to take registration under FCRA Act. However, to be eligible to take the foreign donations/contribution you should be atleast 3 years old company or you should apply for prior permission.

Tags SECTION 8 COMPANY

Q. What are the advantages for Section 8 (pros/merits) company?

By Paras Mehra 10 Feb 2017

Section 8 company is nonprofit company which aims to support the social objectives of the society. There are many advantages of this form over trust and society registration: It is easier to register under Income tax act, 1961 because section 8 company have proper documentation, It is the registered form of NPO and hence more trust factor to people donating into it, Section 8 company can work on PAN India basis and does not require any separate approval, Section 8 company is formed after Central Government approval and hence offers more authenticity.

Tags SECTION 8 COMPANY

Q. What are the disadvantages (cons/demerits) for Section 8 Company?

By Paras Mehra 10 Feb 2017

Section 8 company is one of the best forms to register in case you planning to register a NGO. However, it has certain disadvantages which are as follows: Section 8 company is difficult to start because it requires Central Government Approva, Section 8 compliance cost is high as compared to any other NGO/NPO form, Penalty provisions are little harsh under section 8 company.

Tags SECTION 8 COMPANY

Q. Why it is called NPO, NGO and how it is different from trust registration?

By Paras Mehra 10 Feb 2017

Section 8 company is a company without any profit motive. Its main objective is to achieve the social causes and to help the society in any way possible. NPO, NGO are similar terms and are used inter changeably. NPO and NGO is another name for trust, section 8 company. Trust registration is another option to register NPO in case section 8 company is good for you.

Tags SECTION 8 COMPANY

Q. What are annual Compliances/filing for section 8 Company?

By Paras Mehra 10 Feb 2017

The annual compliances of the section 8 company is very similar to normal companies. The highlights of which are as follows: Need to take atleast two board meeting during the year, Audit is mandatory, Annual return is to be filed every year with other efiling forms like MGT 7 , AOC 4, Further every year income tax return is also required to be filed, Additional compliances to fulfill the registration like 12AA, 80G etc.

Tags SECTION 8 COMPANY