Overview of Section 8 Company Registration
Section 8 Company Registration is amongst the safest known methods for registration of a non-profit organisation in India. Many individuals or organisations interested in philanthropic activities such as education, social welfare, environmental protection, healthcare or in art and culture promotion, primarily apply for Section 8 Company Registration.
Contrary to the other type of companies, a Section 8 company does not focus on making profits for its members. Rather, all its revenue is employed in a bid to promote and advance its social agendas. Section 8 Company Registration not just enable the organisation to gain more credibility and trust amongst the donors but also assist in attracting CSR funds from corporate organisations and supports the various government initiatives.
Since, Section 8 Company is governed by the Companies Act, 2013, it brings transparency, good governance and accountability in the management and helps in better utilisation of funds.
Section 8 Company Registration offers a professional and well-known structure to individuals and organisations who are ardent in creating a positive impact in society. It enables organisations to run their activities in a well-structured and legally acceptable manner, partner with other organisations as well as engage in long term social development.
Minimum Requirements for Section 8 Company Registration
Section 8 Company Registration in India (a non-profit company under the Companies Act, 2013), requires the fulfilment of following basic requirements: -
Minimum Directors: A minimum of two directors are required for the incorporation of a Section 8 company.
Minimum Members/Shareholders: A minimum of two members are required at the time of incorporation of Section 8 Company.
No Minimum Capital Requirement: There is no minimum capital requirement for Section 8 Companies.
Objective of Section 8 Company:
- Section 8 Company must be formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment, or any such other object.
- Profits/income generated in due course of social activities must be applied only for promoting the company’s objectives.
- Section 8 Company shall never distribute any of its profits as dividends or any other means to its members.
Registered Office Proof:
- Rent Agreement (if rented)
- NOC from the owner
- Utility bill not older than 60 Days
Key Benefits of Section 8 Company Registration
Registering a non-profit organisation under Section 8 of the Companies Act, 2013 offers several benefits, including the following:
No Minimum Capital Needed:
A Section 8 Company does not have any mandatory minimum capital for incorporation.
Tax Exemptions:
A Section 8 Company can obtain registration under Section 332 of the Income Tax Act, 2025 (corresponding to erstwhile Section 12A/12AB), which grants exemption on its income applied towards charitable objects. Additionally, it can secure approval under Section 354 (corresponding to erstwhile Section 80G), allowing donors to claim deductions on donations made to the company.
Exemption from Stamp Duty:
Unlike other companies, a Section 8 Company enjoys a significant benefit by being exempt from paying stamp duty on its Memorandum of Association (MOA) and Articles of Association (AOA) during the incorporation process. However, it's important to note that in states like Kerala and Maharashtra, stamp duty is still applicable even for Section 8 Companies.
Limited Liability:
The members of a Section 8 Company enjoy limited liability, meaning they are responsible only to the extent of their shareholding and are not personally liable for the company’s debts or losses.
Separate Legal Identity:
A Section 8 Company possesses a distinct legal identity, separate from its members. It continues to exist irrespective of any changes in its membership.
Credibility:
Due to stringent regulatory oversight, Section 8 Companies are perceived as more transparent and credible by donors, government agencies, and other stakeholders.
Exemption for donors:
Donations made to a Section 8 Company that has obtained registration under Section 332 and approval under Section 354 of the Income Tax Act, 2025, are eligible for tax deductions in the hands of the donors (corresponding to the erstwhile Sections 12A and 80G of the Income Tax Act, 1961).
Perpetual existence:
Section 8 companies have a perpetual existence, which means that they can continue to exist even if members or directors change, and their objects and activities can continue even after their incorporation.
Documents and details required for section 8 company registration
Here is a detailed list of Documents and Details required for Section 8 Company Registration under the Companies Act, 2013:
For Directors and Members:
PAN card (for Indians) / Passport (for foreigners)
Address proof – Aadhaar, voter ID, passport, or driving license
Residential proof – Latest utility bill or bank statements, not older than two months.
Passport-size photo of each director/member
For the Company:
Digital Signature Certificate (DSC) – required for each director/member.
Director Identification Number (DIN) – required for each director.
Memorandum of Association (MOA) – Outlines the primary objectives and purpose for which the company is being formed.
Articles of Association (AOA) – Outlines the internal rules and regulations of the company.
Proof of Registered Office Address – includes the latest copy of Utility bill (electricity, water, gas, etc.) + No Objection Certificate if the property is rented.
Step by step process of Section 8 Company Registration:
Here’s a detailed step by step process of Section 8 Company registration:
Preparation of DSC (Digital Signature Certificate)
A Digital Signature Certificate (DSC) is mandatory for all proposed directors and subscribers to the Memorandum of Association (MOA) and Articles of Association (AOA) of Section 8 Company. The digital signature is equivalent of a physical signature and is used for filing forms online with the Ministry of Corporate Affairs (MCA).
Application for name reservation in Form Spice+ Part A.
Once DSCs are acquired, an application is made to reserve a suitable name for the proposed Section 8 company. This can be done by filing Form SPICe+ Part A on the MCA portal. You must propose up to two unique names that matches the objective of the company. The name should end with words like Foundation, Council, Federation or Association, and must comply with MCA naming guidelines. After approval, the chosen name is held reserve for 20 days, during which the registration process must proceed.
Alternatively, both the Name and Incorporation can be filed through Form SPICe+ Part B.
Ensure name availability is checked prior to submission to avoid rejection.
While making an application for name of proposed Section 8 Company, you should consider the following points-
- The proposed name shall be in accordance with the main business activities of the company.
- The proposed name does not fall under the category of undesirable names, as defined in Rule 8 of the Companies (Incorporation) Rules, 2014.
- As per Rule 8(7) of the Companies (Incorporation) Rules, 2014, a Section 8 Company’s name should include words such as Foundation, Forum, Association, Federation, Chambers, Confederation, or other similar terms that clearly reflect its charitable or non-profit character.
- Section 8 Companies are not required to use 'Limited' or 'Private Limited' in their name.
Application for Incorporation of Section 8 Company
The incorporation process is done through the SPICe+ Part B web form, enabling a single application for various services. These include name reservation, incorporation of a new company, allotment of Director Identification Number (DIN), PAN and TAN, GSTIN (if applicable), EPFO registration, ESIC registration, opening of a company bank account, Profession Tax registration (If Applicable), and Shops and Establishment registration.
Upload the following documents:
- Memorandum of Association;
- Article of Association;
- A Declaration by the subscriber to the memorandum in Form INC 15
- Identity Proof of the Members/Directors
- Address Proof of the Members/Directors
- Projected Income and Expenditure Statement
- Proof of Registered office of the company
- NOC from the owner of the premises
Certificate of Incorporation
If the Concerned Registrar of Companies is satisfied that all the conditions of the Companies Act, 2013 have been met with, a Certificate of Incorporation is issued which includes a unique Company Identification Number (CIN).
Post-Incorporation Compliance
Once the Section 8 Company Registration is complete, the company is required to comply with the following post-incorporation obligations:
- Open a bank account
- Apply for NGO Darpan Registration
- Apply under Section 332 of the Income Tax Act, 2025 (corresponding to erstwhile Section 12A/12AB).
- Apply under Section 354 (corresponding to erstwhile Section 80G)
- Submit annual returns to the Registrar of Companies (ROC) and file Income Tax returns.
Key Differences Between Trust, Society, and a Section 8 Company
| Feature | Trust | Society | Section 8 company |
|---|---|---|---|
| Governing Law | Indian Trusts Act/state laws | Societies Registration Act, 1860 | Companies Act, 2013 |
| Registration Authority | Sub-Registrar | Registrar of Societies | Registrar of Companies (RoC) |
| Compliance Requirement | Low | Moderate | High |
| Suitable For | Family, religious causes | Community-based projects | Corporate style NGOs |
| Minimum Members | 2 Trustees | 7 Members | 2 Directors/Members |
| Governance Document | Trust Deed | MoA and Rules & Regulations | MoA and AoA |
| Preference in registration under FCRA | Low Preference | Low Preference | Preferred |
| Transparency | Low | Low | High |
| Registration Period(approximately) | 15-20 days | 15-20 days | 5-7 days |
| Grants and subsidies from the government | Not much | Not much | Preferred |
| 80G and 12A Registration | Possible | Possible | Possible |
Compliances required to be done by a section 8 company
Here is a detailed list of compliances required to be done by a Section 8 Company under the Companies Act, 2013, Income Tax Act, 2025 and other applicable laws in India:
Board Meetings
The Board of Directors, of Section 8 Company shall hold at least one meeting within every six calendar months.
Annual General Meeting (AGM)
An Annual General Meeting (AGM) must be held every year within 6 months of the end of the financial year.
Annual Filings with ROC
A. Form AOC-4 – Financial Statements: To be filed within 30 days of AGM.
B. Form MGT-7 – Annual Return: To be filed within 60 days of AGM.
Director KYC (Form DIR-3 KYC)
All directors holding a DIN are required to file DIR-3 KYC every year by 30th September. Non-compliance results in DIN deactivation with penalty.
Auditor Appointment (Form ADT-1)
The company must appoint an auditor and inform the ROC by filing Form ADT-1.
Filing of Income Tax Return:
Section 8 companies must file their income tax return by September 30th of every year to provide a summary of the company’s total income.
12AB and 80G Registration
The company must appoint an auditor and inform the ROC by filing Form ADT-1.
- To avail income tax exemption, obtaining 12AB registration is mandatory.
- 80G certificate allows donors to claim tax deductions on donations made to the company.
Section 332 and Section 354 Registration as per Income Tax Act, 2025 (corresponding to erstwhile Sections 12A/12AB and 80G of the Income Tax Act, 1961)
Obtaining registration under Section 332 is mandatory to avail income tax exemption on the surplus income of the Section 8 Company used for charitable purposes.
Approval under Section 354 enables donors to claim tax deductions on donations made to the registered Section 8 Company.
Frequently Asked Questions (FAQs)
What is a Section 8 company?
A Section 8 company, formed under the Companies Act, 2013 in India, stands out as a non-profit organization dedicated to promoting charitable, social, educational, or similar causes without the intent of distributing profits to its members. Its core purpose is to foster initiatives aimed at societal betterment, such as promoting education, health, environmental conservation, or humanitarian causes.
What are the minimum requirements to register a Section 8 Company?
The minimum requirements for Section 8 Company Registration are: -
- Minimum 2 directors.
- Minimum 2 members
- One Indian resident director.
- No minimum capital requirement.
- Charitable object
Who is eligible to set up a Section 8 Company?
A Section 8 Company can be set up by any individual, group of individuals, or legal entities, including companies and societies.
What are the objectives of section 8 company?
These companies are typically formed for the purpose of furthering a specific charitable or not-for-profit objective, rather than for generating profits for its members or shareholders. The key goal is to serve society and contribute to social, cultural, educational, or environmental causes.
What documents are needed to register a Section 8 Company?
The following documents are needed for Section 8 Company Registration: -
- Aadhaar Card
- Copy of the PAN Card of the Directors and Shareholders
- Copy of latest Bank Statement
- Telephone Bill or Electricity Bill, Gass Bill
- Voter ID or Passport or Driving license
- A Passport sized photograph.
- Copy of the Rental agreement, if in case the property is on rented.
Is appointing an auditor compulsory for a Section 8 Company?
Yes, it is mandatory. Section 8 companies must adhere to audit and annual compliance requirements similar to other companies under the Companies Act, 2013.
Can a Section 8 Company be transformed into another form of company?
Yes, but such a conversion like changing into a private or public limited company requires prior approval from the Regional Director.
What is the minimum paid up capital requirement for section 8 company?
In the companies act, 2013, there is no minimum paid up capital requirement is specified.
Are Section 8 Companies allowed to share profits with their members or shareholders?
No, these companies must reinvest any profits back into their primary objectives and are not permitted to distribute them among members or shareholders.
Is it possible to change a Section 8 Company into a profit making company?
Yes a Section 8 company can be converted into a Private Limited company.
Are there specific audit requirements for Section 8 Companies?
Yes, like other companies, Section 8 entities are required to get their accounts audited annually by a qualified chartered accountant in compliance with the Companies Act, 2013.
Is Section 8 Company registration better than a Trust or Society?
Yes, Section 8 Company Registration is considered better than a trust or society because Section 8 Company offers:
- Higher credibility
- Stronger governance framework
- Better access to funding and foreign donations
Does a Section 8 Company get tax benefits?
Section 8 Company Registration helps to get tax benefits: -
Section 332 (for income tax exemption) and Section 354 (allows donors to claim tax deductions) Registrations as per Income Tax Act, 2025(corresponding to erstwhile Section 12A/12AB and 80G)
Why founders prefer Section 8 Company Registration over Trust or Society for their non-profit organisation?
Many founders prefer Section 8 Company Registration because it offers limited liability protection while maintaining their charitable focus.
How many board meetings a Section 8 Company should conduct in a financial year?
The Board of Directors, of Section 8 Company shall hold at least one meeting within every six calendar months.
16 Can a Section 8 Company own a regular for-profit subsidiary?
Yes, a Section 8 Company may hold shares in a profit-making company (making it a subsidiary company), but it cannot distribute the dividend received from the subsidiary to the members of Section 8 Company.
Can an existing for-profit Private Limited entity convert and opt for Section 8 Company Registration status?
yes, under Section 8(4)(ii) of the Companies Act, a profit-making company can apply to the Regional Director to opt for a Section 8 Company Registration license.
What are the consequences if a Section 8 Company registration get revoked?
If a Section 8 Company registration gets revoked, the National Company Law Tribunal (NCLT) can direct the Section 8 Company to either completely wind up its operations or amalgamate with another identical Section 8 Company holding a valid Section 8 Company Registration.
