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Section 8 Company (NGO) Registration

A Section 8 Company is the most credible corporate structure for a non-profit in India. Registered under Section 8 of the Companies Act, 2013, it is formed to promote objects such as education, charity, science, art, sports, social welfare, religion, or protection of the environment, and it applies all its income towards those objects rather than paying dividends to members. Licensed by the Central Government and regulated by the Ministry of Corporate Affairs, it offers limited liability, a separate legal identity, and strong donor and CSR credibility, while being exempt from using ‘Limited’ or ‘Private Limited’ in its name.

Section 8 Company: A Detailed Guide

A Section 8 Company is a company formed for promoting charitable or not-for-profit objects, with a legal personality separate from its members and the protection of limited liability. What distinguishes it from a Trust or Society is that it is incorporated under the Companies Act, governed centrally by the MCA, and held to the same standards of audit and disclosure as other companies, which gives it greater credibility with donors, corporates, and international funders. Its profits and income must be applied solely to its objects, and no dividend may be paid to members. It can be registered as a company limited by shares or by guarantee, requires no minimum capital, and obtains a licence under Section 8 at the time of incorporation.

Advantages of a Section 8 Company

A Section 8 Company offers strong advantages for non-profits:

  • High Credibility: Central licensing and MCA regulation make it the preferred structure for donors and CSR funders.
  • Tax Benefits: It can register under Section 12AB for income exemption and under Section 80G so donors can claim deductions.
  • CSR Eligibility: With valid 12A and 80G, it can register in Form CSR-1 to receive corporate CSR funding.
  • Limited Liability and Separate Identity: Members are protected, and the company continues regardless of changes in membership.
  • No Minimum Capital: It can be registered with any reasonable amount of capital.
  • Name Flexibility: It is exempt from adding ‘Limited’ or ‘Private Limited’ and can use words like Foundation, Association, or Council.

Disadvantages of a Section 8 Company

A Section 8 Company also has obligations to weigh:

  • No Profit Distribution: Income must be applied to the objects; no dividend or benefit can be passed to members.
  • Government Approvals: The Memorandum and Articles cannot be altered without Central Government approval.
  • Full Company Compliance: Annual filings, statutory audit, and ROC compliance apply just as for other companies.
  • Licence Conditions: Acting outside its objects can put the Section 8 licence at risk of revocation.
  • Separate Tax Registrations: It is not automatically tax-exempt; 12AB and 80G must be obtained and maintained.
  • Foreign Funding Restrictions: Receiving foreign contributions requires separate FCRA registration with the Ministry of Home Affairs.

Minimum Requirements for Incorporation

To incorporate a Section 8 Company, the following are required:

  • Directors: A minimum of 2 directors for a private company or 3 for a public company, with at least one resident in India.
  • Members: At least 2 members (private) or 7 (public); a private Section 8 company is capped at 200 members.
  • Charitable Object: A clear not-for-profit object such as education, charity, science, art, sports, or social welfare.
  • DSC and DIN: Digital Signature Certificates and DINs for the proposed directors.
  • Registered Office: A valid address in India with supporting proof.
  • No Minimum Capital: There is no statutory minimum capital requirement.
  • Declarations: Declaration in Form INC-14 by a professional and INC-15 by the applicants, with three-year income and expenditure projections.

Eligibility Criteria

Eligibility for a Section 8 licence is object-driven:

  • The company must be formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or protection of the environment, among similar objects.
  • It must intend to apply its profits and income only in promoting those objects and to prohibit the payment of dividends.
  • Individuals, bodies corporate, and (with valid documents) foreign nationals and NRIs can be members or directors.
  • At least one director must be resident in India.
  • Existing Trusts, Societies, or other companies can also be converted into a Section 8 Company.

Governing Law and the SPICe+ Process

A Section 8 Company is governed by Section 8 of the Companies Act, 2013 and the Companies (Incorporation) Rules, and is licensed by the Central Government through the Registrar under powers delegated by the MCA. Since the Companies (Incorporation) Sixth Amendment Rules, 2019, the earlier separate licence application in Form INC-12 is no longer required for new companies; the Section 8 licence is now granted as part of incorporation through the integrated SPICe+ form. The electronic Memorandum is filed in Form INC-13, with declarations in INC-14 (by a practising professional) and INC-15 (by the applicants), along with three-year income and expenditure projections and INC-9. On approval, the Registrar issues the Certificate of Incorporation together with the Section 8 licence and the CIN, and PAN and TAN are allotted automatically.

Documents Required

For Directors and Members:

  • PAN card and Aadhaar card of all directors and subscribers.
  • Identity proof (Voter ID, Passport, or Driving Licence) and address proof not older than two months.
  • Passport-size photographs; for foreign nationals, a notarised or apostilled passport.
  • Digital Signature Certificates for the proposed directors.

For the Company and Registered Office:

  • Draft Memorandum (INC-13) and Articles, and declarations in INC-14 and INC-15.
  • Three-year projected income and expenditure statement and a note on the proposed work.
  • Latest utility bill for the office (not older than two months), a No Objection Certificate from the owner, and the rent or lease agreement if rented.

Section 8 Company Registration Process

Section 8 incorporation is fully online and follows these steps:

  1. Obtain Digital Signature Certificates (DSC) for all proposed directors.
  2. Reserve the company name through SPICe+ Part A, using a not-for-profit word such as Foundation, Association, or Council.
  3. Draft the MOA (INC-13) and AOA setting out the charitable objects and the prohibition on dividends.
  4. Prepare the declarations in INC-14 (by a professional) and INC-15 (by the applicants) with three-year financial projections.
  5. File SPICe+ Part B with directors, registered office, and NIC code, together with AGILE-PRO-S and INC-9; the Section 8 licence is processed within the same filing.
  6. ROC verification and approval, after which the Certificate of Incorporation and Section 8 licence are issued with CIN, PAN, and TAN.
  7. Apply for tax and CSR registrations such as 12AB, 80G, and CSR-1 to unlock exemptions and CSR funding.

Register your Section 8 Company with Samkhya

Registering your Section 8 Company with Samkhya Corporate Services is simple. Just follow these easy steps:

  • Tell us about your mission: Share the proposed name, objects, and the founding directors and members.
  • Confirm the structure: We help you finalise the objects, the MOA and AOA, and the required declarations.
  • Fill the form: Complete our online form and upload the directors’ and members’ documents.

From there, our team handles name reservation, the SPICe+ filing with the Section 8 licence, and guidance on 12AB, 80G, and CSR-1 registrations.

Post-Incorporation Compliances

A Section 8 Company must meet full company compliance plus non-profit registrations:

  • First Auditor and Audit: Appoint the first auditor within 30 days and file ADT-1; a statutory audit is mandatory.
  • Annual Filings: AOC-4 (financial statements) and MGT-7 (annual return) with the Registrar each year.
  • Income Tax Return: File ITR-7; income applied to charitable objects is exempt where 12AB registration is in place, subject to applying at least 85% of income.
  • 12AB and 80G: Obtain and renew registration under Section 12AB for income exemption and 80G for donor deductions.
  • CSR-1: File Form CSR-1 with the MCA, with valid 12A and 80G, to receive corporate CSR funds.
  • FCRA (if applicable): Obtain FCRA registration from the Ministry of Home Affairs before receiving foreign contributions, generally after three years of existence.

Tax Implications

A Section 8 Company is not automatically exempt from tax. To exempt its income it must register under Section 12AB of the Income-tax Act and apply at least 85% of its income towards its charitable objects under Section 11; misuse of income or benefit to specified persons can cause the exemption to be lost under Section 13. Registration under Section 80G allows donors to claim a deduction on their contributions, which strengthens fundraising. A Section 8 Company registered as a charitable institution is generally outside the Minimum Alternate Tax net. Where it is not registered under 12AB, it is taxed as a company at the applicable corporate rates. Maintaining these registrations, along with ITR-7 and audit reports in Form 10B or 10BB, is essential.

Business Structure Comparison Table

Feature Section 8 Company Trust Society
Governing Law Companies Act, 2013. Indian Trusts Act, 1882 (or state law). Societies Registration Act, 1860.
Regulator MCA / Registrar of Companies. State Sub-Registrar / Charity Commissioner. State Registrar of Societies.
Separate Legal Entity Yes. Limited. Yes.
Members / Trustees Min 2 (private) or 7 (public). Minimum 2 trustees. Minimum 7 members.
Minimum Capital None. None. None.
Compliance and Credibility High compliance; highest credibility. Low compliance; moderate credibility. Moderate on both.
CSR Funding Eligible with 12A, 80G, CSR-1. Eligible with registrations. Eligible with registrations.
Ideal For Structured NGOs and CSR partners. Family or private charity. Membership-based associations.

Frequently Asked Questions

What is a Section 8 Company?

It is a non-profit company under Section 8 of the Companies Act, 2013, formed to promote objects like education, charity, science, art, sports, or social welfare, applying its income to those objects and paying no dividend to members.

Is a separate INC-12 licence application still required?

No. Since the Companies (Incorporation) Sixth Amendment Rules, 2019, the Section 8 licence is issued as part of incorporation through SPICe+, so a separate INC-12 filing is not needed for new companies.

Does a Section 8 Company need minimum capital?

No. There is no statutory minimum capital requirement, so it can be registered with any reasonable amount of capital.

Is a Section 8 Company automatically tax-exempt?

No. It must register under Section 12AB to exempt its income and apply at least 85% of income to its objects. Registration under 80G lets donors claim deductions.

Can it receive CSR and foreign funding?

Yes. With valid 12A and 80G it can file Form CSR-1 to receive corporate CSR funds. Foreign contributions require separate FCRA registration, generally available after three years.

How long does registration take?

Typically about 10 to 15 working days once documents are in order, subject to name approval and the Section 8 licence being granted at incorporation.