What Are The Advantages Of A Section 8 Company?

Advantages of Forming a Section 8 Company in India

1. Limited Liability: Members and directors of a Section 8 Company have limited liability, protecting their personal assets. Their liability is limited to their contribution.

2. Tax Benefits: Section 8 Companies enjoy tax benefits, including exemptions from income tax and tax deductions for donors under Section 80G of the Income Tax Act.

3. Separate Legal Entity: A Section 8 Company is a distinct legal entity, able to own property, enter contracts, and sue or be sued in its own name.

4. Perpetual Succession: A Section 8 Company has perpetual succession, ensuring its charitable activities continue despite changes in membership or directorship.

5. No Minimum Capital Requirement: Unlike other companies, there is no minimum capital requirement for a Section 8 Company, allowing it to operate with minimal capital.

6. Exemptions from Stamp Duty: Section 8 Companies may be eligible for exemptions from certain stamp duty requirements, reducing transaction costs.

7. Access to Grants and Funding: Section 8 Companies can access grants, donations, and funding from government agencies, NGOs, and international organizations to support their charitable projects.

8. Credibility and Trust: Section 8 Companies are viewed as credible and trustworthy organizations, aiding in fundraising and partnerships.

9. Limited Compliance: Compliance requirements for Section 8 Companies are typically less burdensome, making it easier for them to maintain operations.

10. Flexibility: Section 8 Companies have flexibility in their operations and can undertake a wide range of charitable activities.

11. Ease of Formation: The process of forming a Section 8 Company is well-defined and relatively straightforward, provided the objectives align with charitable purposes.