What is Section-8 Company?
A Section 8 Company is a type of non-profit organization registered under Section 8 of the Companies Act, 2013 in India. The primary objective of such a company is to promote activities related to charity, education, art, science, sports, social welfare, environment protection, or any other purpose beneficial to society. Unlike regular companies, the goal of a Section 8 Company is not to earn profits for distribution among its members or shareholders. Instead, any income or profit generated must be used only to further its social or charitable objectives.
Section 8 Companies enjoy various tax exemptions and legal benefits because they operate for the greater public good. They are allowed to function either as private limited or public limited companies, but they cannot use words like "Private Limited" or "Limited" in their name. These companies are regulated by the Ministry of Corporate Affairs (MCA) and require approval from the Central Government at the time of incorporation.