CA Inter P2 · Chapter 2 · Question 7 of 11
Which of the following purposes does NOT qualify a company for a licence under section 8?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Distribution of profits to members by way of dividend
Explanation
Section 8 applies to a company formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or similar objects. It must apply its profits or income to promoting those objects, and its articles must prohibit the payment of dividend to members.
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