SECTION 8 COMPANY(NGO)
A Section 8 Company means:
- is formed to promote commerce, art, science, education, research, sports, charity, social welfare, religion, environmental protection, or any other objects
- It intends to use all of its profits, income, and other earnings to promote these objectives.
- Members receive no dividends or income.
These are limited companies registered under the Companies Act, and they will be treated as such without the phrase “limited” added to their name. They could have been registered as “private limited companies” or “public limited companies.”
Section 8 Companies are a legal type/form for “non-profit organisations (NPOs) or non-governmental organisations (NGOs).”A Section 8 Company is authorised to operate anywhere in the country.
Eligibility for incorporation of Section 8 Company under the companies act, 2013.
In addition to the three points mentioned in the definition section above, for a Section 8 Company to be registered, the following criteria must also be met:
Registration under which act: Companies Act, 2013
License: To be applied to MCA
Directors: In section 8 company must be a minimum of 2 Directors for a Private Limited Company and 3 Directors for a Public Limited Company.
Indian resident: At least one director must be an Indian resident, having spent at least 120 days in India in the previous calendar year [(Section 149(3) as per new changes in 2022]
MoA subscribers: If the company is to be incorporated as a private or public company, the MoA must have at least two or three subscribers.
MoA & AoA: Determine the name to be applied for, the objects to be carried out by the Company, the planned registered office address, the number of Directors and promoters, the authorised capital, and the number of shares to be subscribed for by each promoter.
Initial capital: The proposed initial capital for the incorporation of the company, must be invested within two months.
Annual compliance: To adhere to the set compliances, the company must file annual accounts, statements, and returns with the ROC.