Structured Biiz

SECTION 8 COMPANY (NOT FOR PROFIT)​

Who must opt for Section 8 Company & Why?

Section 8 Company is a Non-Profit Organisation or a Company incorporated with a Charitable purpose. It is basically established for promoting Commerce, Art, Science, Sports, Education, Research, Social Welfare, Religion, Charity, Protection of environment or any such other object, provided the profits or other income is applied for promoting only the objects of the Company and no dividend or profit is paid to its members. All the profits and incomes are compulsorily required to be utilised towards charitable purposes for which the Section 8 Company is formed. The incorporation process is the same as that of the other companies. Some additional requirements are required to be complied with, for issuance of licenses under Section 8.

Section 8 Company enjoys the status of being a separate legal entity having perpetual existence, unless dissolved. It can own, sell and transfer property and can also incur debts.  It also enjoys a Limited Liability structure benefits, wherein the Owner’s personal assets are not attached to the business liabilities for repaying off the debts or for paying off the creditors.

Section 8 Company can apply for 12A registration under the Income Tax Act, 1961 in order to enjoy the exemption from paying income tax on their surplus income. However, new registrations for income tax exemption needs to be obtained under Section 12AB with effect from 1st April, 2021. Post 1st April, 2021, provisional registration shall be granted to new registrations for a period of 3 years.

Once Section 8 Company obtains Section 80G Certificate, entities or individuals making an eligible donation to such Section 8 Company can avail tax exemption on the amount donated. With effect from 1st April, 2021, Section 80G Certificate shall be granted for a period of 5 years. Even old Section 8 (Erstwhile Section 25) Company also needs to apply afresh for 80G Certificate.

In case Section 8 Company intends to raise foreign contributions for promoting the cause, then a registration under Foreign Contribution & Regulation Act is required to be obtained. Section 8 Company must be in existence for a minimum of 3 (Three) years, while making FCRA registration.

Difference between Society, Trust & Section 8 Company

Society

Trust

Section 8 Company

Compulsory Annual Compliances

Post Formation Compulsory Compliances

Compliances & Registrations After Formation

Company Formation Package

INR 16,899/-

All inclusive

Timeline: 15-30 Days
(*Inclusive of Govt. Fees on Form filing. Govt Fees is as applicable in Maharashtra. Govt Fees will vary as per the State and the difference shall be payable by the Client.)

Request you to provide 2 Unique Names of the Company. In case the name approval is not granted in the first instance, Govt Fee of Rs. 1,000/- and Our Fee of Rs. 999 shall be charged separately for re-application of name.

Post Formation Compliance Package

INR 9,999/-

Inclusive of GST

(*Excluding Govt. fee and reimbursements, if any. and any penalty levied due to delay from the Client's end.)