1. Non-Profit Nature: Section 8 Companies are established primarily for charitable or not-for-profit purposes. They are prohibited from distributing profits to their members or shareholders. Any income generated by the company must be reinvested in furthering its objectives.

2. Limited Liability: Similar to other forms of companies, members of Section 8 Companies enjoy limited liability. This means that their personal assets are generally protected from the debts and liabilities of the organization.

3. Government Approval: Section 8 Companies require approval from the Central Government (Ministry of Corporate Affairs) for incorporation. The application must include a detailed memorandum and articles of association outlining the company’s objectives and activities.

4. Name: The name of a Section 8 Company typically ends with words like “Foundation,” “Association,” “Society,” “Council,” “Charity,” “Institute,” “Organization,” “Federation,” “Trust,” “Club,” “Chamber of Commerce,” or “Development.”

5. Tax Benefits: Section 8 Companies are eligible for tax exemptions under the Income Tax Act, 1961, for their income derived from charitable activities. Donations made to these organizations may also qualify for tax deductions.

6. Regulatory Compliance: Section 8 Companies must comply with various regulatory requirements, including filing annual financial statements, conducting regular audits, and adhering to reporting standards prescribed by the government.

7. Restrictions on Distribution of Profits: Section 8 Companies are prohibited from distributing dividends to their members. Any surplus generated from their activities must be utilized for furthering their objectives or reinvested in the organization.

8. Dissolution: If a Section 8 Company wishes to wind up its operations, it must seek approval from the Central Government. Any remaining assets after settling debts and liabilities must be transferred to another organization with similar objectives.