Section-8 Company Registration

Overview

A Section-8 Company is a non-profit organisation registered under Section 8 of the Companies Act, 2013 for the promotion of charitable objects such as education, art, science, sports, social welfare, religion, charity, environmental protection or any other object of general public utility. The profits of a Section-8 Company, if any, are applied solely towards promoting these objectives and cannot be distributed as dividends to its members. A Section-8 Company enjoys the credibility of a corporate structure along with several tax exemptions, making it the preferred vehicle for NGOs, foundations and social enterprises in India.

What is a Section-8 Company?

A Section-8 Company is a special category of company formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any other such useful object. It must apply its income and profits solely for promoting its objects and is strictly prohibited from paying any dividend to its members. This makes it the corporate equivalent of an NGO, with the structure and credibility of a company and the social mission of a trust or society.

Key features of a Section-8 Company

• Formed exclusively for promoting charitable or not-for-profit objects
• Profits must be reinvested in furthering the objects of the company
• No dividend is paid to the members
• Can be limited by shares or by guarantee, with or without share capital
• Words like 'Private Limited' or 'Limited' need not be added to the name
• Registered and regulated by the Ministry of Corporate Affairs

Eligibility for Section-8 Company registration

• Minimum 2 directors for a private Section-8 Company and 3 directors for a public Section-8 Company
• Minimum 2 shareholders (can be the same as the directors)
• At least one director must be a resident of India
• Clear, well-drafted charitable objects in the MOA
• Realistic three-year financial projection of income and expenditure
• Registered office address in India

Tax benefits and post-registration compliance

Section-8 Companies are eligible for income tax exemptions on their charitable income after obtaining registration under Section 12A. They can also issue 80G donation receipts to donors after registering under Section 80G of the Income Tax Act. To receive foreign donations, registration under FCRA is required. Annual compliance includes filing Form AOC-4 and MGT-7, conducting a statutory audit, holding board and general meetings, and filing the income tax return of the company every year.

Why choose us

• Higher credibility than a Trust or Society
• Separate legal entity with limited liability
• Eligible for tax exemptions under Section 12A and 80G of the Income Tax Act
• No minimum capital requirement
• Stamp duty exemption on incorporation documents in many states
• Easier to receive grants, CSR funds and foreign contributions (with FCRA)
• Perpetual succession independent of its members

Documents required

• PAN card and Aadhaar card of all proposed directors and members
• Passport-size photographs of all directors
• Latest address proof of directors (bank statement, electricity or mobile bill)
• Registered office proof (rent agreement plus NOC, or ownership proof)
• Latest utility bill of the registered office (not older than 2 months)
• Draft Memorandum of Association (MOA in Form INC-13) and Articles of Association
• Declarations in Form INC-14 and INC-15 by professionals and applicants
• Estimated income and expenditure for next 3 years
• Detailed grounds and statement of the proposed work of the company
• Digital Signature Certificate (DSC) of all proposed directors

Our process

1. 1

   Obtain DSC and DIN

   Apply for Class-3 DSC for all directors; DIN is allotted via SPICe+.

2. 2

   Name reservation

   Reserve a unique name through SPICe+ Part A ending with words like Foundation, Association, Federation, etc.

3. 3

   Draft MOA, AOA and supporting documents

   Draft INC-13 MOA, AOA, INC-14, INC-15 and the 3-year financial projection along with the project report.

4. 4

   File SPICe+ application

   File the SPICe+ form with all linked attachments, declarations and the project plan.

5. 5

   License under Section 8

   The Registrar examines the application and issues a license in Form INC-16 authorising the company to operate under Section 8.

6. 6

   Certificate of Incorporation

   Once the license is granted, the COI along with PAN and TAN is issued to the company.

7. 7

   Post-incorporation registrations

   We help with 12A, 80G, CSR-1, Niti Aayog Darpan and FCRA registrations to enable tax exemptions and funding.