Aside from businesses that make money, there are some businesses whose primary goal isn’t to make money running their regular businesses. Their primary objective is charitable and not-for-profit. Section 8 of the Companies Act of 2013 defines these kinds of businesses, which is why they are referred to as Section 8 companies.
A Section 8 company and a trust differ only marginally. The Central Government oversees a Section 8 company, whereas the State Government oversees a Trust.
Section 8: Definition of a company:
According to the Companies Act of 2013, a Section 8 company’s mission is to advance the arts, sciences, commerce, research, religion, sports, education, charity, social welfare, environment, or other related fields. The company invests all of their profits in growing their business. Additionally, no dividends are distributed to their members.
What a Section 8 Company Is Like?
- The objectives of a non-profit organization are solely charitable because their primary objective is not to generate profits.
- They do not have a prescribed share capital because there is no minimum share capital.
- Limited Liability: These businesses’ members all benefit from limited liability.
- Exemptions: Due to their charitable goals, they qualify for numerous exemptions and benefits under the Companies Act.
- License from the Government: These businesses can only operate with a license from the Central Government. If necessary, the government may also revoke this license.
The following is a list of the top 10 Section 8 companies in India:
There are quite a few Section 8 companies in India.
- The Infosys Foundation is a non-profit organization established to assist the less fortunate in society. It mostly funds programs for rural development, primary education, and other areas.
The Reliance Foundation is an Indian non-profit organization whose mission is to support India’s long-term growth in rural development, education, health, the arts, and culture, among other areas.
- The TATA Foundation was set up to help people who want to make a difference in the world. Because their areas of work include nutrition, healthcare, livelihood, education, and more, it raises hopes for a sustainable and promising future.
- Reliance Research Institute is a research-driven organization that focuses on higher education and basic, applied, and related technologies in the life sciences.
- The Federation of Indian Chambers of Commerce and Industry (FICCI) conducts surveys, publishes reports, conducts in-depth research papers, and offers analyses of each and every sector of the global economy. India-based, it is a trade association and advocacy group that is not run by the government.
- Confederation of Indian Industries (CII) is a non-governmental trade association and advocacy group that works with political, business, academic, and other social leaders to influence regional, industrial, and global policy.
- Chamber of Commerce for Indian and International Trade – Their primary objective is to boost investment, trade, and commerce across Indian and international borders.
- Pratham Education Foundation is a cutting-edge educational organization based in Mumbai that was established to raise the standard of education in India. It contributes to the improvement of poor Indian children’s access to high-quality education.
- Health and Education Foundation, Mumbai—This private organization works to improve India’s health and education conditions.
- India International Trade Centre in Mumbai is working to promote bilateral investments, inbound and outbound investments, and other forms of international trade. They focus on supporting financial institutions, business alliances, and other medium and large businesses.
Know more: What is section 8 company registration?
Documents and requirements for establishing a Section 8 company:
Directors and shareholders can be the same person, but there should be at least two shareholders and at least two directors. Minimum capital is not required, and at least one of the Directors must be a resident of India. By re-converting itself into a private/public organization and then re-converting it into a Section 8, even a “One Person Company” (OPC) can become a Section 8 company.
Documents that Directors Need:
- Copy of PAN Card with Self-Attestation: The Income Tax Department issues PAN cards, which are individual identification cards. During incorporation, directors are required to submit their PAN.
- Address Proof: A Director must provide proof of their address that includes their name in accordance with the PAN. It could be in the form of an election card or voter identity card, a passport, a ration card, an Aadhar card, or a bill for electricity or phone service.
- Residential Proof: The Director’s name as specified by the PAN must be included in the residential proof. They may take the form of a mobile bill, telephone bill, electricity bill, or bank statement.
- Photograph in the Size of a Passport: During the incorporation process, the Directors are required to submit a passport-sized photo.
Required Documents for a Registered Office:
There is no letter of objection from the owner of the address to use the premises and address of the company’s registered office.
The owner of the property or address must sign the water, gas, electricity, and phone bills.