Benefits or Advantages of Section 8 Company

Section 8 Company is a legal entity that promotes commerce, art, science, sports, education, research, social welfare, religion, charity, environmental protection, and the likes of it.

A Section 8 Company is almost identical to a Society or a Trust. It is registered with the Central Ministry of Corporate Affairs but Society and Trust are registered with the State Government. 

Section 8 company registration online has quite a lot of advantages like better legal standing; improved recognition and the donors, as well as stakeholders, consider it much more reliable as compared to a Trust or a Society.

Why sec 8 company preferred over ngo or trust?

80G of the Income Tax Act, 1961 and the Section 8 Companies Act 2013 provides many benefits to Companies under Section 8 registration as compared to an NGO or trust. The stamp duty for companies registered as Sec 8 is less and it doesn’t require much share capital. Therefore funding and donation to companies registered under Section 8 are easier than to an NGO or trust. Above all, tax benefits on donation to the companies registered under Sec 8 are much higher as compared to other organizations involved in social services.

 Section 8 Company: Benefits or Advantages 

  Following are the list of Benefits or Advantages for Companies Registered under Section 8:

• Tax Exemption to the donors: Those donating to a Section 8 Company are eligible for tax exemptions u/s 12A and 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. 
• Ease at transferring ownership/title:   Section 8 companies to transfer their ownership or title thereby, enabling the transfer of both movable and immovable interest without any hurdles or restrictions.
• No 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/ Title: 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.
• Donation & Funding: Section 8 Company is not allowed to raise capitals by way of deposits but they can accept donations from the general public. There is no limitation to domestic donations. But to avoid money laundering cases, a proper system must be laid down to keep them in check.

How can we help you?

Online Legal India™ expert team of highly qualified CA/CS and 10+ years of experienced lawyers who would assist you to Register your Section 8 Company. We have budgeted services for those who are willing to venture into a company, business or any other kind of organization.

After you register your business with MCA (Ministry of Corporate Affairs), you need to do trademark registration which is essential for all businesses.

If section 8 companies want to start export business inter-state or international, they must have an import-export code which is being validated by DGFT (Directorate General of Foreign Trade).