If you intend to start non for profit activity for social welfare or social cause, Section-8 Company is the most suitable business structure for you, it is widely regarded as NGO/NPO non governmental organization/non profit organization. It attract donation for social cause.
NGOs can be registered in India under any of the following laws:
1. Society- under Societies Registration Act 1860 (State Government regulations).
2. Trust -under Indian Trusts Act, 1882(State Government regulations).
3. Section 8 Company -under Companies Act, 2013(Central Government regulations).
A section-8 company has various advantages compared to Trust or Society, like improved recognition and better legal standing. Section-8 company also has higher credibility amongst donors, international organizations, Government departments and other stakeholders.
Purpose of NGO – Section 8 Company:
The main purpose of establishing a Section-8 company is to promote non-profit/charitable activity such as commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. The profits/incomes of the company if any, are applied towards promoting the objectives of the company and are not distributed as dividends to its shareholders.
The process of incorporation of a section 8 company is similar to that of a private limited company registration; however there is an additional requirement of seeking a prior license from registrar of companies under section 8 of the companies act, 2013.
Time duration for private limited company registration: Normally it takes 30 working days to get the Section 8 Company registration subject to proposed company name availability approval.
