Section 8 company

  • No Minimum Capital is required
  • Exempted from notify the changes in the Directors to the Registrar
  • Section Eight company

    Companies Incorporated for promotion of commerce, art, science, sports, education, Research, social welfare, religion, charity, protection of environment or any such other object

  • Ensure that its profits and all other incomes are utilized only for the purpose of promoting its objects and not for any other purpose.
  • Ensure that its profits are not distributed as dividend among its members.
  • Section 8 Company cannot alter its objects clause in its Memorandum without seeking the written approval of central government.
  • If the Central Government has imposed some conditions and regulations upon the company for granting a license under section 8 then such a company is bind by such conditions and has to ensure adequate compliance with them.
  • If an existing company obtains a license under section 8 it has to ensure that its objects are confined to those mentioned in section 8 itself and if not make proper alteration to its memorandum and articles.
  • Advantages

  • Section 8 companies are allowed to dispense with the use of term 'limited' or 'private limited' from their names.
  • No Minimum Capital is required to start up a Section 8 Companies.
  • The Company can raise money by accepting deposits and selling its shares to the public.
  • Section 8 companies are exempted from notify the changes in the Directors to the Registrar, it should maintain the Registrar of Directors and recorded the changes in the Directors accordingly.
  • Books of accounts of Section 8 companies are to be obtained only for a period of 4 years.
  • Limitations

  • Company has to ensure that its profits and all other incomes are utilized only for the purpose of promoting its objects and not for any other purpose.
  • The Profit of the company cannot be distributed Dividends to its Shareholders.
  • The Company cannot act beyond the rules imposed by the Central Government, it has to follow the rules and accordingly.
  • Winding up process of Section 8 companies are lengthy and cumbersome process.