Section 8 companies are legal organizations that are started with the thing of upgrading welfare, education, charity, art, science, religion, and other activities essential to profit the society at large. These section 8 companies are synonymous with Non-profit organizations (NPO). Section 8 companies are essentially incorporated to perform the most object of the welfare of the society in any of the sectors as mentioned above.
Types of non-profit organizations:
1. Section 8 Company as per Companies Act, 2013 (Section 25 as per Companies Act, 1956)
2. Societies registered under Section 20 of the Societies Registration Act 1860
3. Trusts formed under Indian Trusts Act 1880
However, Section 8 Companies are considered best due to its systematic constitutional framework. The financial statements, directors’ report and other important documents of a Section 8 Company are easily available online on public inspection and are therefore, considered most reliable.