Section 8 Company

The legal framework of a  Section 8  company is regulated by the Companies Act 2013 and the Rules made thereunder. Section 8  company is a company which is incorporated with charitable objects, social welfare, religion, promotion of sports, education, protection of environment etc.

PRIVILEGES:

A Section 8  company enjoys the privileges & benefits of a limited company without adding to its name “limited” or “private limited”, as the case may be.

INCORPORATION:

Section 8 Company:

1. has the object of promoting commerce, art, science, sports, education, research, social welfare, etc.
2. intends to apply its profits in promoting such objects; and
3. prohibits the payment of dividend

The central government grants a license to a  Section 8  company. A limited company already incorporated can get itself registered as a section 8  company.

WORKING:

• The requirement of having a minimum paid-up share capital, shall not apply to a section 8 company, whether it is a public or a private limited company.
• A Section 8 company can alter its MOA or AOA after Central Government approval.
• A Section 8 company may convert itself into a company of any other kind. For conversion,  the Section 8 company needs to apply to the regional director.
• The requirement of having a minimum/ maximum number of directors or independent directors, shall not apply to it.
• Appointment of a company secretary not required for such a company.

REVOCATION OF LICENCE:

The Central Government may by order revoke the license granted and may direct that such company be wound up or amalgamated with another company, in the public interest.