What Is a Section 8 Company?
A Section 8 Company is a non-profit organization formed with the objective to promote commerce, education, art, science, sports, research, religion, environmental protection, charity, and other socially beneficial goals. Unlike regular companies, a Section 8 Company uses its profits solely for the promotion of its objectives and does not distribute dividends to its members.
This type of company enjoys legal recognition under the Companies Act, 2013, and is governed by the Ministry of Corporate Affairs (MCA) through the Registrar of Companies (RoC). It is considered more credible than trusts or societies, especially in the eyes of government bodies, donors, and international organizations.
Advantages of Registering a Section 8 Company
Registering as a Section 8 Company offers several distinct advantages:
- No minimum paid-up capital requirement
- Exemption from stamp duty on registration
- Tax deductions are available to donors under Section 80G and to the company under Section 12AA of the Income Tax Act
- Allows firms to become members
- Fewer procedural and compliance requirements
- Greater credibility among stakeholders
Minimum Requirements for Incorporation
To register a Section 8 Company, the following basic requirements must be fulfilled:
- Minimum of 2 Directors
- Minimum of 2 Shareholders (can be the same as directors)
- No minimum capital is required to start
- A maximum of 15 directors are allowed
- At least one director must be a resident of India
Documents Required
The following documents are required for registration:
For Directors and Shareholders
- PAN Card (self-attested)
- Identity proof (Passport / Voter ID / Aadhar / Driving License)
- Address proof (Bank statement, electricity/telephone/mobile bill, not older than 2 months)
- Passport-size photographs
For Registered Office
- Proof of address (Electricity or utility bill)
- No Objection Certificate (NOC) from the property owner
- Property ownership documents or a lease agreement
Other Information Needed
- Proposed business objectives and activities
- Educational qualifications and occupation of members
- Email IDs and contact numbers
- Authorized and paid-up capital structure
- Place of birth and residential duration of members and directors
Step-by-Step Registration Process of a Section 8 Company
The registration process of a Section 8 Company is now completely online and integrated with the MCA’s SPICe+ portal.
Step 1: Name Reservation
Apply for name reservation using Part A of SPICe+ on the MCA portal. Ensure the name is unique and does not violate any trademark or government name restrictions.
Step 2: Fill SPICe+ Part B
This part includes all incorporation-related details and requires uploading several attachments, including:
- Memorandum of Association (INC-13)
- Articles of Association
- Declaration by a practicing CA/CS/CMA in Form INC-14
- Financial projection for the next 3 years
- Declaration by directors in Form INC-15
- Statement of assets and liabilities
- Consent of directors (DIR-2)
Step 3: Convert SPICe+ Form to PDF
Once filled, convert the form into PDF format and affix Digital Signature Certificates (DSC).
Step 4: Fill AGILE-PRO Form
This form is required for:
- Opening a bank account
- Registering for EPFO and ESIC
- Applying for GSTIN (if applicable)
After filling, convert to PDF and affix DSC.
Step 5: Upload Forms on MCA Portal
All forms, after affixing DSCs, must be uploaded to the Ministry of Corporate Affairs (MCA) for verification and approval.
Step 6: Declaration of Subscribers and Directors
Form INC-9 (declaration by subscribers and directors) is auto-generated and filed electronically.
Post-Registration Benefits and Compliance
Once registered, a Section 8 Company can:
- Legally operate across India
- Apply for CSR funding from companies
- Avail tax benefits under the Income Tax Act
- Receive foreign contributions (with FCRA registration)
- Enjoy enhanced trust among donors and government bodies
Ongoing compliance includes:
- Filing annual returns and financial statements
- Holding board meetings and maintaining statutory registers
- Renewing licenses (e.g., under Section 12AB and 80G)
- Filing ITR and audit reports
Common Questions about Section 8 Company
1. Is a Section 8 Company better than a Trust or Society?
Yes, it offers higher credibility, central government registration, and better transparency.
2. Do I need to show profits to register?
No, a Section 8 Company is formed for non-profit objectives, and profits must be reinvested into the cause.
3. Can a Section 8 Company take donations?
Yes, and donors can get tax deductions if the company is registered under 80G.
4. Is any government approval required post-registration?
You may need additional licenses like FCRA (for foreign donations) or 12AB for tax exemption.
Final Thoughts
A Section 8 Company is the best option for NGOs and non-profit organizations aiming to create a long-term, legally compliant, and credible structure in India. From education and environmental protection to healthcare and charitable causes, this structure empowers you to make a lasting impact while also enjoying government incentives.
Need expert help with Section 8 Company Registration?
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