Section 8 Company, as defined under the Companies Act, 2013, is a type of nonprofit organization
established for promoting art, commerce, science, sports, education, research, social welfare, religion,
charity, protection of the environment, or any other similar purpose. The name “Section 8” refers to
Section 8 of the Companies Act, which governs the formation and regulation of such companies.

Section 8 Companies are formed with the primary objective of promoting charitable activities and social
welfare, rather than for making profits. These companies apply any surplus or income generated from
their operations towards promoting their objectives, and they enjoy certain exemptions and privileges
under the Act, such as exemptions from certain provisions related to the use of the term “Limited” in
their name and relaxation in compliance requirements.

To incorporate a Section 8 Company, a minimum of two shareholders and two directors (with at least
one director being a resident of India) are required. The company must apply for a license from the
Central Government through the Registrar of Companies (ROC) before incorporating, which involves
submitting a memorandum and articles of association along with the application. The application must
demonstrate that the company’s objectives align with those specified under Section 8 and that the
income and property of the company will be used solely for promoting its objectives.

Section 8 Companies operate similarly to other companies in terms of governance, with directors
managing the company’s affairs and making decisions in line with its stated objectives. They are
required to comply with statutory obligations such as annual filings, conducting audits, and maintaining
proper accounts. The primary distinction lies in their nonprofit motive and the utilization of their
resources towards social or charitable causes, making them instrumental in driving philanthropic
initiatives and community development across India.