A Section 8 Company is an organization that is registered as a Non-Profit Organization (NPO). NPO/company has the objectives of promotion of arts, commerce, charity, education and protection of the environment, science, social welfare, sports, research, religion. It intends to apply its profits, if any, or other income for the promotion of its objects. It functions are exactly like a limited company and has all the rights and obligations that come with such a company. However, it differs from a company in a very crucial aspect, i.e. it is not allowed to use the words “Section 8” or “Limited” in its name. The income of the Company must be used to promote only charitable objects and they are restricted to pay any dividend to the members of the company. An incorporation certificate is provided to all such companies by the central government. It also informs them about some restrictions and conditions they have to follow. In case they fail to fulfil them, the central government may also order them to wind up the company. In case fraud objectives of the Company are proved, legal action will be taken against all officers of the Company.
The name of your Section 8 Company is of great importance. Your Section 8 Company’s name will be the first impression to your buyers, suppliers as well as stakeholders. Therefore it should be attractive, relevant and suggestive. There are several factors that you should keep in mind while choosing a name for your company.
The name should be concise and not too long. The first time they hear or read your company's name, people should be able to recall and pronounce your company’s name easily.
Name of your Section 8 Company must not be identical to an existing LLP or a company or any trademark or for which a trademark has been applied for. You can go to search.legalraasta.com to check if your company name matches with any other. Ideally, you should avoid using any plural version of an existing name e.g, “Snapdeals” or mere changing of the letter case or punctuation marks or spacing in an existing LLP, Company and Trademark name.
Section 8 Companies should not end their name with “Section 8” or “Limited”
The name of your LLP should not be violating any law. It should not be abusive or against the customs and beliefs of any religion and should not use words or phrases which are used as a slur and are offensive to a particular group of people. Further, names cannot include foul words or phrases.
Ensure that your Section 8 Company’s name is not be given under or violates the Emblems and Names (Prevention of Improper use) Act, 1950.