# Section 8 – Companies with Charitable Objectives

## The big idea

Section 8 companies are non-profit companies that may be registered as 'limited' liability without the words "Limited" or "Private Limited" in their name. They enjoy the corporate form but cannot distribute profits — surplus must be applied to promoting their objects.

## 1. Objects Permitted (Sec. 8(1))

A Section 8 company may be formed for promoting:

Commerce, Art, Science, Sports, Education, Research
Social welfare, Religion, Charity
Protection of the environment
Or any such other useful object

Two essential conditions apply:

1. Profits (if any) shall be applied only in promoting its objects, AND

2. Dividend payment to members is prohibited.

## 2. Registration Procedure

Step	Action
1	File Form SPICe+ (INC-32) with prescribed fees
2	Attach MOA and AOA
3	Attach 3-year financial estimates
4	Furnish a declaration by a professional (Advocate / CA / CMA / CS in practice) AND by the applicant

The declaration must state:

MOA & AOA comply with Sec. 8 and the related rules, and
All legal requirements for registration u/s 8 have been met.

## 3. Privileges Enjoyed (the 'reliefs package')

Privilege	Effect
Same privileges/obligations as a limited company	Recognised body corporate
General meetings with 14 days' notice (vs. 21 days)	Faster decision making
Exempt from minimum directors & Independent Director rules	Lighter board
No Nomination / Remuneration Committee required	Reduced governance burden
A Partnership Firm can be a member	Wider membership pool
Limited liability but NO 'Limited'/'Private Limited' suffix	Public identification as charitable

## 4. Alteration of MOA / AOA

Document	Approving Authority
MOA	Prior approval of CG (powers delegated to Regional Director)
AOA	Prior approval of CG (powers delegated to ROC)

Key distinction: ordinary companies alter MOA via special resolution alone (Sec. 13); Sec. 8 companies require prior CG/RD approval because the company's charitable character must be preserved.

Worked example

### Example 1

Q. 'GreenEarth' is being incorporated to promote environmental protection. The promoters want a corporate form without the word 'Limited'. Outline the procedure.

A. (1) Apply in Form SPICe+ (INC-32) with fees. (2) Attach MOA, AOA and 3-year financial estimates. (3) Furnish declaration by a CA/CS/CMA/Advocate in practice and the applicant that the MOA & AOA comply with Sec. 8 and that all registration requirements u/s 8 are met. (4) Profits, if any, will be applied solely to environmental protection; no dividend may be paid.

### Example 2

Q. A Section 8 company wishes to alter its objects clause. Can it do so by a special resolution alone?

A. No. A Section 8 company requires prior approval of the Central Government (delegated to the Regional Director) before altering its MOA, in addition to the special resolution under Sec. 13.

⚠️ Common exam mistakes

Believing Section 8 companies cannot make profits — they CAN, but profits must be ploughed back into objects.
Forgetting that Sec. 8 companies do NOT use 'Ltd.'/'Pvt. Ltd.' in their name even though liability is limited.
Confusing which authority approves alteration — MOA: CG/RD; AOA: CG/ROC.
Stating Sec. 8 companies must convene general meetings with 21 days' notice — they need only 14 days.
Stating Sec. 8 companies must appoint independent directors — they are exempt.

Bare-Act text Section 8(1) · Companies Act, 2013 · click to expand

Sec. 8(1): Where it is proved to the satisfaction of the Central Government that a person or an association of persons proposed to be registered under this Act as a limited company — (a) has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object; (b) intends to apply its profits, if any, or other income in promoting its objects; and (c) intends to prohibit the payment of any dividend to its members, the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word 'Limited' or 'Private Limited'.

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Section 8 Companies (Charitable Objects) – Formation

Worked example

⚠️ Common exam mistakes