Section 8 corporations are businesses that promote social welfare, charity, education, science, art, religion, and other endeavors that benefit society as a whole.
Non-profit organizations look for Sec 8 registration
Non-profit organizations are the term used to describe these entities (NPO). They were formed largely to carry out the above-mentioned principal purpose of welfare in the field.
- Know the fundamentals of having Section 8 Corporation
Let’s start with the fundamentals of the Section 8 Corporation. As we all know, our legal framework allows for a variety of corporate structures, including LLPs, private limited companies, and public limited companies.
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Each of the business structures covered below has its own set of legal ramifications and regulations. All of these business entities can operate as a Section 8 corporation. The section 8 company registration can be done from Legal Syne.
However, the One Person Company (OPC) is an exception to this rule. Let us now go over the several advantages of Section 8 Company Registration.
- What are the advantages of Section 8 Company?
Now let us understand various advantages of Section 8 Company Registration:
- Tax Exemption
- No minimum capital requirement
- No stamp duty payable
- Separate Legal entity
- No title required
- Obtain minimum capitals
Unlike other legal forms, section 8 entities are not required to obtain minimum capital to secure their continued existence. Furthermore, these companies have the freedom to change their financing structure at any time to expand their capabilities.
- Section 8 registration enjoys its own legal status
Like other business arrangements, an entity with Section 8 registration enjoys its own legal status. These entities excel at the continuous existence paradigm, which means they will continue to exist even if its founding members are no longer alive.
What the law says?
According to Section 8 of the Companies Act of 2013, a company is one that seeks to promote the arts, sciences, sports, education, environmental preservation, social welfare, charity, or other comparable goals.
The ultimate goal of forming a Section 8 Company is to encourage non-profit objectives such as trade, arts, business, education, charity, environmental protection, sports research, social welfare, and so on.
At least two directors are necessary to register a Section 8 entity. Furthermore, there is no requirement to secure a minimum paid-up capital in order to establish such a corporation.
Section 8 corporations are not legally obligated to pay the stamp duty for registration as other business formations such as a private or public limited company are.The sec 8 company registration is an important document.
- Characteristics of a Section 8 Corporation
Charitable goals: Section 8 corporations are not in the business of making money
Limited liability: Members of these corporations can only be held liable to a certain extent.
Section 8 corporations, unlike all other corporations, are exempt from having to have a minimum paid-up share capital. On the other hand, trust or society excels at mild compliances, which makes them less credible when compared to Section 8 firms.
In comparison to Trust or society, a Section 8 Company develops increased credibility. The laws that govern these corporations are just as strict as those that govern other types of businesses, such as private or public limited companies.