Charitable Trusts can be set up in three different forms, namely

(a) register a trust under Indian Trust Act (register the trust at Sub-Registrar’s Office)

(b) Register it as a society under State Co-operative Societies Act or

(c) incorporate a company under Companies Act, 2013

The registration of a company under Companies Act, 2013 is popularly known as ‘Section 8’ company

+ Who can set up a Section 8 company?

• The companies with the objective of promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other objective;
•  Intends to apply its profits, if any, or other income in promoting its objectives; and
• Intends to prohibit the payment of any dividend to its members; can be registered as Section 8 Company.

+ What registrations are required under Income Tax Act?

Charitable Trusts including Section 8 companies are eligible for tax exemption u/s 11, 12, 12A, 12AA, 13 and 80G of the Income Tax Act. The expression “charitable purpose” has been defined under

Section 2(15) of the Act to include:(a) relief of the poor,(b) education,(c) medical relief, and (d) advancement of any other object of general public utility.

+ Can Section 8 company merge with another company?

Yes. Section 8 companies can amalgamate only with other section 8 company and having similar objectives

We at Balakrishna and Co., have incorporated Section 8 companies and obtained Income Tax exemptions for them.