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Section 8 Company Registration
Formation of this Company with charitable objects as per section 8 of Companies Act 2013, Section 8 Company or a Non-Profit organization (NPO) is a Company established for promoting commerce, art, science, religion, charity or the other helpful object, provided the profits, if any, or alternative financial gain is applied for promoting only the objects of the company and no dividend is paid to its members. Section 8 Company, like every alternative company, needs to undergo a correct registration procedure. But, it's still quite completely different compared to other companies. Unlike other companies, Section 8 Companies are given certain exemptions and benefits.
A Section 8 Company is comparable to a Trust or Society; expect a Section 8 Company is registered under the Central Government's Ministry of company Affairs. Trusts and Societies are registered under State Government regulations. A section 8 Company has varied benefits when compared to Trust or Society like improved recognition and higher legal standing. Section 8 company additionally has higher believability amongst donors, Government departments and other stakeholders.
ADVANTAGES OF SECTION 8 COMPANY REGISTRATION
Tax benefits
Section 8 Companies are non-profit-making Companies they're exempted from certain income tax provisions as per Sec 80G of Income tax act 1961. They're additionally given various deductions and edges. People donating cash to Section 8 Companies also avail the advantages of deduction. Nonprofit making companies also have to pay less stamp duty with compare to other companies.
Transfer of ownership
The members of private limited company are prohibited to transfer their shares. However in Section 8 Company members will simply transfer the ownership of the company. Each movable and unmovable interest of members may be simply transferred to people. Thus, the ownership of the Company can be transferred without too many restrictions.