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In India, a Non-Profit Organisation can be registered by 3 ways : (1) Trust by executing a Trust deed (under Indian Trusts Act, 1880) ; (2) Society under the Registrar of Societies (under Societies Registration Act, 1860 ); or (3) Non-Profit Company as Section 8 Company (under Companies Act, 2013). A Section 8 Company is the same as Section 25 company under the old Companies Act, 1956. Under the new Companies Act 2013, Section 25 (as per the old Act) has now become Section 8.
A Section 8 company can be established for the “promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object”. Moreover,proceeds generated by the entity must solely be used in promoting its object and there is no payment of any dividend to its members.
Shareholder enjoys limited liability to the extent of capital invested. In case of any unforeseen liabilities, it would be limited to the company and not impact the shareholders. Shareholder's personal assets protected in the event of the company's insolvency.
A Section 8 company is a Separate legal entity from its Owners and Management in the eyes of law.It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.
Section 8 Companies are not required to add the suffix title “Limited” or “Private Limited” at the end of their name.
A Section 8 Company has more credibility as compared to any other Non-profit organization structure like Trust or Society.
There is no minimum share capital requirement in formation of Section 8 Company. In case they are formed without capital, the necessary funds for carrying the business are brought in form of donations, subscriptions from members and general public.
Section 8 Companies are given numerous deductions and other tax benefits. One of such exemption is under Section 80G of the Income Tax Act, 1961, whereby donors to Non-Profit Organizations may claim a 50% rebate against donations made.They are also required to pay less stamp duty as compared to other organizations.
A Section 8 Company has to ensure that its profits and all other incomes are utilized only for the purpose of promoting its objects and not for any other purpose. Moreover, it should also ensure that its profits are not distributed as dividend among its members.
Section 8 Companies cannot alter its objects clause in its Memorandum and Articles without seeking the written approval of Central Government.
Section 8 Companies license can be revoked easily in case of non-adherence to its object and compliances.
~ Conveyance/ Lease deed/ Rent Agreement
~ NOC from Owner
~ Latest Utility Bill of registered Office
~ PAN Card
~ Identity Proof ( Voter’s ID / Passport / Driving License )
~ Address Proof ( Latest Telephone Bill / Electricity Bill/ Bank Account Statement )