A section 8 company which earlier was known as section 25 company is a legal form for non profit organizations (NPO) or Non Governmental organizations (NGO). A company status is always highly recognized in compare to trust or society, therefore Section 8 Companies have higher credibility among st Government departments, Donors and other stakeholder.
Main features of section “8” Company
Charitable Objects: A section 8 Company has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other charitable objects.
Profit for Promotion of objects: Section 8 company will apply its profits (if any) in promoting its objects.
No Dividends: Section 8 Companies are prohibited to declare and/or pay any dividend to its members.
Loan Limits For MFIs
Borrower with a rural household annual income not exceeding Rs. 1,00,000 or urban and semi-urban household income not exceeding Rs. 1,60,000 will be eligible ;
Loan amount will not exceed Rs. 60,000 in the first cycle and Rs. 1,00,000 in subsequent cycles;
Total indebtedness of the borrower will not exceed Rs. 1,00,000
Tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 30,000 with prepayment without penalty;