In India a charitable organization can be registered either as a trust, society or Section 8 company. Section 8 companies are those companies which are formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members. Thus, there are three criteria for determining whether a particular company is section 8 company or not:
- Its objects should be only to commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object
- Intends to apply its profits, if any, or other income in promoting its objects; and
- Prohibits payment of dividend to its members
Section 8 Company’s registration procedure is similar to that of a Private /Public Company except for an additional requirement of taking License from Central Government after name approval.
If you have any queries on which entity to select for NGO, how to form a Section 8 company, feel free to contact us. We assure you that our experienced team will address your queries and find the best possible solution.