A Section 8 Company is a Company which:
Is incorporated for the encouragement of commerce, art, science, education, research, sports, charity, social welfare, religion, safety of surroundings or any such other scope .
It plan to apply all its profits, income, or other earnings, in encourage these scope
Pays no dividend or income to its members.
These are limited companies, registered under the Companies Act, and will be manage as limited companies without the phrase “limited” added to their name. They may have been registered as private limited or public limited companies.
Section 25 Company (under Companies Act, 1956) is a advance catogory Section 8 Companies are a legal form for Non-Profit Organizations (NPOs) or Non-Governmental organizations (NGOs). A Section 8 Company has the power to work anywhere in the country.

The compulsory need to start section 8 company are as follows:
Minimum Requirement
A Section 8 Company gets incorporated by the MCA.
All need of the Companies Act 2013, such as the minimum number of Directors and Shareholders, etc. must be met with.
Charitable Object
Section 8 Companies can be accepted for non-profit aim only. Any profit earned or income received by this Company is not to be distributed among its members.
All needs of the Companies Act 2013, such as the minimum number of Directors and Shareholders, etc. must be met with.
Management Team
Unlike other faith which are governed by the Trustees as per a Trust Deed, the functions of Section 8 Companies are run by the Board of the Director as per their MoA and AoA.
MoA & AoA
A Section 8 Company shall not make any alter to the provisions of its MoA & AoA without seeking acceptance from the Central Government first.
Voting Rights
The voting rights of the shareholders of a Section 8 Company are based on the number of shares held by them. Alike to that of any other company.
Income tax
The Company has to follow the provisions of the Income Tax Act.
GST Registration
If Section 8 Company comes under the purview of the GST Act, it must get recorded with GST.
Conversion
It may not change itself to any other kind of company formation without obey with conditions, as applicable.

The name of your Section 8 Company is the first opinion to the world. Its selection, therefore, is very essential . It should stand out, yet be simple to remember, pleasing , connected and expressive . Here are some points you can keep in mind for selecting a name for your company.
Suffix:
Name of Section 8 Company shall include the words Association, Federation, Chambers, Confederation, Council, Electoral trust Foundation, Forum, and other such words. But there is no need to add the word Limited or Private Limited to its name
Meaningful:
Meaningful: The name of your Section 8 Company should indicate the principal objects of the Company as set out in its MoA. For example, Aware Health and Research Foundation or Nagarjuna Agricultural Research and Development Institute are Section 8 Companies. And their names indicate the kind of work undertaken by them. This helps in branding and goodwill.
Offensive:
The proposed name should not fall in the range of undesirable names as specified in Rule 8 of Companies (Incorporation) Rules, 2014. The name of your LLP should not be abusive, against the customs and beliefs of any religion, use slur & foul words or phrases which are used as a slur and are offensive to a particular group of people.
Short & Simple:
The name should be brief and not too long. Moreover, it should be easy to pronounce. A person should recall that name during relevant matters
Unique:
You are not allowed to name your Company that is exactly same or identical to an existing company or trademark or for which a trademark has been applied for. At Inside Tax you can check if the name you are proposing matches someone else.
Indicative:
Every name need not indicate the objects of the company, compulsorily, but when there is some indication of objects in the name, then it shall conform to the objects mentioned.

Section 8 Company is not authorize to raise capitals by way of deposits but they can take donations from the general public. Below are some of the ways by which it can raise finance .
Foreign Donations: Foreign donations are authorize only when FCRA (Foreign Contribution Regulation Act 1976) registration has been taken. FCRA license can only be request after 3-years from the date of registration. However, if some really urgent foreign donations are necessary, then you may request for prior permission from the commissioner.
Equity Funding: Section 8 Company can also lift funds by provide new equity shares at a higher value.
Domestic donations: There is no restrictions to the domestic donations. But to away from money laundering cases, a proper system must be laid down to keep them in check.

If a Section 8 Company fails to follow with the lawful provisions, then the central government may cancel the license issued under this act.
In case of cancelation the company may get wound up. Or it may be easy asked to alter its name to add “Private or Public Limited”. And the assets stand after clearing debts and liabilities of such a Company shall be shifted to some other Section 8 Company having similar things.
If the functions of the Company are found to be managed fraudulently or in contravention with the entity of the Company or unfriendly to public interest then, also, the license can be canceled.
If a company defaults in obey with the provisions of the Act, it shall, without damage to any other action under the provisions of this section, be punishable with fine which shall not be less than Rs. 10 lakh and may expand to Rs. 1 crore. The Directors and all other officers of the company, found in default, shall be punishable with imprisonment for a term which may extend to 3-years, or with fine not be less than Rs. 25, 000 and may extend to Rs. 25 lakh, or both. Provided that it is verify that the functions were manage fraudulently. Then every officer in default shall be liable for operation.
Any such order shall not be passed unless the company has been given a valid opportunity of being catch.

The action and needs of a Section 8 Company are completely the same as laid down for a limited company. involving all the rights and duty that come with such a limited company. The only side where they different is that a Section 8 Company cannot use the words “Section 8” or “Limited” in its name.
The operation of registering a Section 8 Company is the same as incorporating an NGO, Trust or Co-operative Society under the Companies Act 2013.
An further need is there of seeking a license from the central government under Section 8 of the Companies Act, 2013.
The license, mandatory authorize them to remove Private/Public Limited from their name. With this license, the company becomes permitted for certain limitations from provisions of law and have exceptions in the fee.
If the suggest Section 8 Company has been registered as a private limited then a minimum of 2 promoters are need But if it is a public limited Section 8 Company then a minimum of 7 promoters must be there.

existence an NPO or Non-profit Organization does not mean that the Company cannot make a profit or income. It only express that the Company can earn income but the promoters are not to benefit from those profits. The profits cannot be distributed among the promoters. All incomes must be use to devlop the aim .
Still, certain freedom and benefits have been gived for NGO or NPO u/s 8 of Companies Act 2013. Numerous Tax freedom are also there for such companies. Even the donors providing towards Section 8 Company are allowed to claim the Tax freedom against these donations.
Some of the autority are:
Distinct Legal Identity: Section 8 Company has a separate legal entity. Unlike from its members. Its legal position is different from its members. The Company has a perpetual existence. Along with having organized functions and greater variability .
Zero Stamp Duty: A Section 8 Company is free from the need of paying stamp duty on the MoA and AoA of the private or public limited company. Which is suitable for registration of other kinds of company formation .
No Minimum Capital Requirement: No minimum capital limit has been introduce for a Section 8 Company in India. And the capital formation may be changed at any stage as per the devlopment demand of the company. This indicate that it can be organise without any share capital. The funds mandatory for carrying the business functions can be initiate later, in the form of donations and/or subscriptions from members and the general public.
Name: Section 8 Company does not required to suffix Limited or Private Limited, next to its legal name. It can be registered with names that have words similar to Association, Society, Council, Club, Charities, Foundation, Academy, Institute, Organisation, and Federation.
CARO: Essential of Companies Auditor’s Report Order or CARO do not apply to this type of company.
Tax Benefits: For Section 8 Companies in India, many tax benefits are allowed.
Credibility: Section 8 Companies are more stable than all other forms of charitable associations. They are governed by the Companies Act and are controled strictly. Such as the requisite of a compulsory annual audit, or the MOA and AOA cannot be changed at any stage or conition The regulations on managing the profits and losses of the company make these companies reliable .
Exemption to the donors: Those donating to a Section 8 Company are suitable for tax freedom u/s 12A and 80G of the Income Tax Act.
Membership: A registered partnership firm can become a member in its individual range and secure Directorship.