As per Section 8(2) – Section 8 Company shall enjoy all the privileges and be subject to all the obligations of Limited Company.

It is the duty of Company to prove to Central Government that it will incorporate for above mentioned purpose only.

The Central Government may issue license with such conditions as it deems fit and allow the registration of such person or association of persons as a limited company without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”.

The power of the Central government is delegated to the Registrar of Companies (‘ROC’) having Jurisdiction over the area where the Registered office of the company is proposed to be situated.Hence, the application for registering such Company is to be made to the ROC.

As per section 8(3) a partnership firm may become a member of the Non-Profit making Company registered under section 8. Membership of such firm shall cease upon dissolution of the firm. However, partners of the dissolved firm may continue to be the members of such Company in their individual capacity

• Many privileges and exemptions under Company Law vide notification dated 05th June, 2015.
• Exemption of Stamp duty for registration.
• Registered partnership firm can be a member in its own capacity.
• Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act.

These Companies can be formed with or without share capital, in case they are formed without capital, the necessary funds for carrying the business are brought in form of donations , subscriptions from members and general public.

Section 8 Companies are not required to add the suffix Limited or Private Limited at the end of their name. All Companies having limited liability are required to use the term ‘limited’ or ‘private limited’ as the case may be in their names as required by section 13. But section 25 companies are allowed to dispense with the use of term ‘limited’ or ‘private limited’ from their names [sub-sec. (6)]. This helps the Company to enjoy limited liability without disclosing to the public the nature of liability of its members.

• The name shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust and the like etc.
• At present following words are not allowed for Incorporation of Section 8 Company; “Organization”, “Institute”, “word other than mentioned above” Earlier these words were allowed for incorporation of Section 8 Company and even there are many section 8 companies ending with such prefix. Therefore, It can be opine “and the like etc” can’t use for incorporation of Section 8 Company as per latest Resubmissions or Rejections.

The shares and other interest of any member in the Company shall be a movable property and can be transferable in the manner provided by the Articles, which is otherwise not easily possible in other business forms. Therefore, it is easier to become or leave the membership of the Company or otherwise it is easier to transfer the ownership.