Is Section 8 Company A Private Company

Is Section 8 Company A Private Company

In India, Non-Profit organizations can register themselves either under the Trust Act, 1882 or the Societies Registration Act, 1860 or can be registered as company under the Section 8 of the Companies Act, 2013 (previously under Section 25 of the Companies Act, 1956). When any company is registered under the Section 8 of the Companies Act, 2013 as a non-profit entity with the aim of charity or non-profit purposes then it is known as Section 8 Company.

What are the eligibilities for Incorporation of Section 8 Company?

In case of Private Limited NGO

  • Minimum 2 Shareholders & Maximum up to 200
  • Minimum 2 directors & Maximum up to 15
  • Registered Office Address

In case of Public Limited NGO

  • Minimum 7 Shareholders & Maximum there is no limit
  • Minimum 3 directors & Maximum up to 15
  • Registered Office Address

Objective

To encourage art, science, commerce, charity, education, religion, protection of the environment, social welfare, sports, research or any other advantageous object such as for any charitable or not-for-profit purposes.

Voluntary Winding-up

It can be closed only by surrendering its license to operate as a non-profit company and such license can be surrendered only by converting its structure into Private Limited Company. Thereafter, the company can follow the winding-up process of Private Limited.

Tax Exemptions

Various Tax exemptions are provided to Section 8 Company and/or to the donors who are contributing to such companies

Consequently, the structure of both of the companies are quite similar but are absolutely different from each other in terms of their main objective and functioning as the Section 8 company is formed for charitable purposes while Private Limited company is formed for profit-making purpose.

Created & Posted by (Anuj)

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