To give easy credit to people belonging to the marginal class of society who are traditionally considered unsuitable for lending, microcredit companies were established. These companies increase financial inclusion by giving small credit to small and medium enterprises and people belonging to the lower-income group.
NGOs intending to serve the small income group of society by lending small loans can be registered as Section 8 companies under the Companies Act 2013 or as a trust under the Trusts Act 1882. They can also register under the Societies Act 1860. Section 8 company registration is the incorporation process of such NGOs under the Companies Act 2013.
These companies can be registered with an objective to promote Science, Commerce, Art, Technology, Sports, Social Research, Education, Social Welfare, Charity, Religion, and Environment protection. Section 8 companies are allowed to work anywhere after completion of the registration process.
There are various advantages of obtaining Section 8 company registration under the Companies Act 2013. Let’s understand them in the following section.
The following are minimum criteria that need to be met by an NGO willing to register as a Section 8 company.
Here is a quick checklist of documents required to start the procedure of Section 8 company registration.
NGOs intending to serve the lower-income group of society by lending small loans can be registered as Section 8 companies under the Companies Act 2013 or as a trust under the Trusts Act 1882. They can also register under the Societies Act 1860.
The objective of Section 8 Company must be promotion of Science, Art, Sports, social welfare, or giving financial assistance to small income groups.