One of the main benefits of running an NGO is that you have an opportunity to serve the community via funds and volunteer work. It’s also an opportunity to solve an issue, which is not good for the community.
Section 8 Company Registration is named after Section 8 of the Companies Act, 2013, which allows us to establish an NGO with the objects - 'of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object', provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members.”
Section 25 Company (under Companies Act, 1956) and Section 8 (under Companies Act, 2013) both are the same.
Section 8 Companies are a legal structure of Non-Profit Organizations (NPOs) or Non-Governmental organizations (NGOs) with the authority to work across the country. It is similar to a Trust or Society; the only difference is of the governing authorities. A Section 8 Company is registered and governed under the Central Government's Ministry of Corporate Affairs whereas Trusts and Societies are regulated under State Government regulations.
The main object of these companies is to ensure the promotion of the above-mentioned fields, provided the profit can only be used for promoting only objects of the company as per Sec 8(1)(b)). Sec 8 (1) (c) there is a prohibition of payment of any sort of dividend to its members.
Section 8 Company does not require to use words 'LTD' or 'PVT LTD' as a suffix in their name. They require to add Foundation or Association as suffixes. Also, there is no such requirement regarding the minimum capital, from June 5, 2015.
Section 8 companies have a license provided by the government under Section 8 Companies Act, which gives them advantage of better credibility to Section 8.