Companies Act section 8 — Section 8 company licence and governance
Reviewed by CA Divyanshu Sengar · Last reviewed 29 August 2026
A Section 8 company is a non-profit structure incorporated under a special Central Government licence, prohibited from paying dividends to its members.
Finin2min Summary — in 2 Minutes
A Section 8 company is a non-profit structure incorporated under a special Central Government licence, prohibited from paying dividends to its members.
Official source and legal ownership
What this covers
Section 8 of the Companies Act, 2013 allows incorporation of a company for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, or similar objects, where the company intends to apply its profits (if any) toward promoting those objects and prohibits payment of any dividend to its members.
How the licence and governance work
A Section 8 company requires a specific Central Government licence (issued through the Registrar of Companies) before incorporation, and its memorandum cannot be altered without government approval - a materially more restrictive incorporation and governance framework than an ordinary company, reflecting its non-profit character.
Why it matters
A Section 8 company is a distinct legal form from a trust or society - it offers the specific advantages and disciplines of company-law governance (board structure, statutory filings, potentially easier structuring for certain funding relationships) while remaining bound by the no-dividend and objects restrictions that make it recognisably non-profit despite being a company.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Official starting point
- www.indiacode.gov.in