A Section 8 Company in India, as per the Companies Act, 2013, is a type of nonprofit organization formed with the objective of promoting social welfare, charity, education, religion, art, science, sports, or any other charitable purpose. Unlike other companies, it is prohibited from distributing profits to its members and instead utilizes its income and resources for achieving its charitable objectives. These companies must apply any surplus or income generated solely towards the promotion of its objectives and are subject to regulations set forth by the Ministry of Corporate Affairs.
The right registration for non-profit and charitable organizations. A company limited by guarantee and registered under section 8 of The Companies Act, 2013 is a non-profit company and is popularly known as Section 8 Company.As per the The Companies Act, 2013, a Section 8 Company should promote activities only related to the public cause of stated objects and the income if any should be solely used for promotion of such activities. As the law states it intends to apply its profits, if any or other income in promoting its objects and intends to prohibit the payment of any dividend to its members.