Benefits of Section 8 Company in India
Section 8 companies are similar to Trust or Society except for one factor that is a section 8 company register itself under Central Government’s Ministry of Corporate Affairs. In contrast to, Trust or Societies which gets registered under State Government regulations. The prescribed meaning of Section 8 Company pertains to Section 8 of Companies Act, 2013, which also supports its objective. To establish a Section 8 company, one needs to acquire the license and its essential to follow the annual compliances with the Ministry of Corporate Affairs (MCA) for the smooth operation of the company.
Benefits of Section 8 Company
A section 8 company yields an array of Advantages, unlike a Society or Trust. Following is the list of advantages for companies registered under Section 8:
Tax benefits: Since Section 8 companies are a non-profit organization, so they leverage the exemption from the provision of income tax. The companies also get various other tax benefits and deductions. They employ many perks under section 80G of the Income Tax Act.
Zero Stamp Duty: A Section 8 company do not have to pay stamp duty on the AoA and MoA of the private or public limited company which other companies surely pays.
The ease at transferring ownership/title: The limited liability companies don’t have the advantages to transfer their title or ownership, but the Income Tax Act, 1961 does not confide Section 8 companies to transfer their ownership or title thereby, enabling the transfer of both movable and immovable interest without any hurdles or restrictions. Minimal share capital: Unlike the other limited companies like public, private, or one person, a Section 8 company do not need much share capital to set up the entity. The members can directly use the funds from their subscriptions or donations.
Exempted from any name: In opposes to other companies who are under obligation to use their company’s name as ‘limited company’, section 8 companies get exempted from the use of any title. Thus, they can perform their functions without updating the public about their limited liability status.
Separate legal entity: Section 8 company has a distinct legal entity which means the company’s existence is different from its members. The company has a perpetual existence along with greater flexibility.
Created & Posted By Aashima
Accounts Executive at TAXAJ
TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are:
Launch Your Start-Up Company/Business,
Trademark & Brand Registration,
Digital Marketing,
E-Stamp Paper Online,
Closure of Business,
Legal Services,
Payroll Services, etc. For any further queries related to this or anything else visit
TAXAJ
TAXAJ Corporate Services LLP
Address: 1/11, 1st Floor, Sulahkul Vihar, Old Palam Road, Dwarka, Delhi-110078
Related Articles
How to Register a Nidhi Company
A Nidhi company refers to a type of entity in the non-banking finance sector, recognized under Section 406 of the Companies Act, 2013. Their primary business is borrowing as well as lending funds between their members. They are also regarded as ...
One Person Company shall hold its AGM
In India One Person Company is the modern form of business which is proposed by the Companies Act, 2013. It is a hybrid structure which combines most of the benefits of a sole proprietorship and a company from of business. Therefore it does away with ...
Essential Elements of a Partnership Business
The law relating to partnership firm in India is prescribed in the Indian Partnership Act of 1932. This Act lays down the rights and duties of the partners between themselves and other legal relations between partners and third persons, which are ...
Section 8 Company Registration procedure for social welfare
As per the Companies Act, 2013, Section 8 Company refers to a corporation that aims to incentivize arts, sciences, sports, education, environment preservation, social welfare, charity, or other similar objectives. The ultimate objection of ...
Using a Section 8 Company for Corporate Incubation Programs
Introduction In India, corporate innovation and entrepreneurship have been on the rise, driven by both government initiatives and private sector participation. One of the most effective vehicles to channel innovation and support startups is through ...