Top Section 8 Companies in India: Leading the Way in Social Entrepreneurship

Introduction

A Section 8 company is a non-profit organization. It is an essential type of company as defined under section 8 of the Companies Act, 2013. The companies are formed to promote charitable objectives. 

These objectives can be associated with arts, science, sports, education, research, social welfare, religion, charity, and the environment. The profits of such a company are reinvested into the business. It helps attain the company’s objectives. 

Many Section 8 companies have influenced the corporate world with their impactful work. If you are looking for the stories of some impactful Section 8 companies, this blog is for you! Scroll below to read about some of the best Section 8 companies in India. 

What is a Section 8 Company? 

A Section 8 company in India is a non-profit organization defined under the Companies Act 2013. These companies are incorporated to promote charitable objectives such as arts, science, sports, education, research, social welfare, religion, charity, and environmental protection.They are restricted from distributing profits or dividends to their members.

Instead, the profits earned by them must be reinvested to achieve the company’s objectives further. Section 8 companies can be incorporated as both private or public companies. They are subject to various regulatory requirements to maintain their non-profit status. 

Profits of Section 8 Companies

Section 8 companies are required to reinvest their profits back into the company’s objectives. They cannot distribute them as dividends to shareholders. Unlike other companies, the profits of section 8 companies are used to strengthen the company. They are used to growing the company and reaching closer to their objectives. 

Dissolution of Section 8 Companies 

Section 8 companies are prohibited from distributing their surplus assets and cash to their shareholders after its dissolution. The remaining assets and funds are either taken over by the government or given up to other Section 8 companies having similar objectives. Section 8 companies are prohibited from distributing their profits and capital during operation and after dissolution as well. 

Key Features of Section 8 Companies

Non-profit objective

The primary goal of a section 8 company is to promote social benefit, encourage art, sciences, education and related activities, and other charitable activities.

Prohibition on distributing dividends

Profits earned by section 8 companies are reinvested in the company’s objectives, and dividends are not distributed to members.

Limited Liability

Members have limited liability protection.

Legal Structure

A section 8 company can be incorporated as private or public. They do not have to add suffixes like “Limited” or “Private Limited.”

Eligibility Criteria for Section 8 Companies

Only those companies that are focusing on charitable deeds should register themselves as a section 8 company. Their profits should be used solely to promote their objectives. The company must follow a ‘no dividend’ policy. 

Any act that is beyond the charitable object of the company is prohibited. Now that we know what a section 8 company is let’s look at some of the top section 8 companies in India. 

Top Section 8 companies in India

Here are some popular Section 8 companies in India that are leaving a solid mark for their impactful work in various sectors:

Infosys Foundation

Infosys Ltd established the Infosys Foundation. The foundation focuses on supporting projects in education, rural development, healthcare, arts and culture, and care for the underprivileged. It has been working extensively to improve education and healthcare facilities across rural India. 

The foundation works under the principles of: 

‘Bahujana hithaya, bahujana sukhaya’ – for the benefit of many, for the happiness of many

The company collaborates with NGOs (Non-Government Organizations) that aim to make a change in society. 

The foundation receives requests for funding of projects from NGOs. The panel of experts verifies these proposals and prioritizes projects concerning their impact. Available funds are granted to different projects. 

Reliance Foundation

Reliance Foundation is the philanthropic body of Reliance Industries. It aims to promote sustainable growth in the areas of rural development, education, health, arts, and culture.

It has collaborated with several large-scale initiatives like Bharat-India Jodo, Project Drishti, and more.

Tata Trusts

The Tata Trust is one of the oldest and most influential charitable organizations in India. The section 8 company, Tata Trusts, works in various sectors. They have worked in healthcare, nutrition, water and sanitation, education, and rural development sectors. The foundation has significantly contributed to improving the quality of life in backward and less privileged parts of the community. 

Azim Premji Foundation

Azim Premji Foundation was founded by Azim Premji to dedicate funds to improving the quality of education in India. Promoting education and schooling, it is a popular Section 8 company in India. It focuses on large-scale and long-term changes through teacher education, educational leadership, and curricular support. The foundation believes in steady and long-term growth in the education industry. 

Aga Khan Foundation

The Aga Khan Foundation (AKF) works to improve the quality of life in disadvantaged areas of the society. It focuses on health, education, rural development, and civil society. It runs several programs in India aimed at poverty alleviation and empowerment. It seeks to eradicate poverty from the nation one area at a time. 

Health And Education Foundation, Mumbai

This foundation primarily works to enhance healthcare and educational facilities in Mumbai. It undertakes various projects to improve medical infrastructure and support educational initiatives in the city.

India International Trade Centre (IITC), Mumbai

IITC promotes domestic and international trade through various programs and services aimed at enhancing business opportunities and economic growth.

Impact and Importance of Section 8 companies. 

Section 8 companies play an essential role in developing various areas of India. Many of them work to fill in the gaps left behind by the public sector and the government. The companies bridge gaps in areas where more than government intervention may be required. 

They help the underprivileged sections or regions of the nation to join the developed parts of the country. By focusing on different sectors such as education, healthcare, rural development, and environmental protection, these companies contribute to the steady and sustainable development of the nation. 

Conclusion

Section 8 companies are essential in fostering social welfare and development in India. Their unique structure allows them to focus entirely on charitable objectives, reinvesting profits to further their causes. 

Companies like Infosys Foundation, Reliance Foundation, and Tata Trusts exemplify the impactful work being done by Section 8 companies. For anyone looking to start a Section 8 company, understanding the eligibility criteria, registration process, and documentation requirements is essential to ensure compliance and effective operation.

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