A Non-Profit Company is a legal entity formed for charitable or social purposes rather than for making profits. In India, it is usually registered under Section 8 of the Companies Act, 2013, and is commonly known as a Section 8 Company.
The main objective of a non-profit company is to promote activities related to education, health, social welfare, art, culture, environment, or religion. Any income or profit earned by the company is used only for advancing its goals and cannot be distributed to its members or directors.
Non-profit companies enjoy several benefits:
- Legal recognition and credibility
- Eligibility for tax exemptions under Section 12A and 80G of the Income Tax Act
- Access to government grants, foreign funding (with FCRA approval), and donations
To register, the company must apply to the Ministry of Corporate Affairs (MCA) with documents outlining its objectives and must receive a license to operate as a Section 8 Company.
This structure is ideal for NGOs, trusts, foundations, and charitable societies that want to work professionally while staying legally compliant and transparent.