Overview

A Section 8 Company is a type of non-profit organization registered under the Companies Act, 2013, in India. Its primary objective is to promote arts, commerce, education, charity, protection of the environment, sports, science, social welfare, religion, or other charitable purposes. Unlike other companies, Section 8 companies apply their profits solely towards the furtherance of their objectives and are prohibited from distributing dividends to their members.

This legal structure is ideal for individuals or groups aiming to establish a charitable or non-profit organization with a formal corporate identity, enhanced credibility, and compliance benefits.

Why

Registering a Section 8 company offers several advantages:

1. Legal Status – Enjoys separate legal entity status.
2. Credibility – More reliable and trusted by donors, government bodies, and financial institutions.
3. Tax Exemptions – Eligible for multiple tax exemptions under the Income Tax Act (after obtaining 12A & 80G registration).
4. No Minimum Capital Requirement – There is no minimum paid-up capital requirement.
5. Limited Liability – Members have limited liability, protecting personal assets.
6. Perpetual Succession – Continues to exist regardless of changes in membership.
7. Ease of Fundraising – Can raise funds through grants, donations, and CSR contributions; international donations permitted post-FCRA approval.”
8. Better Governance – Mandatory compliance ensures transparency and accountability.

Process

The process of Section 8 company registration is as follows:

1. Digital Signature Certificate (DSC) – Obtain DSC for all proposed directors.
2. Director Identification Number (DIN) – Apply for DIN for directors via SPICe+ Form.
3. Name Reservation – Reserve a unique name using the RUN (Reserve Unique Name) form, with “Foundation”, “Association”, “Society”, etc.
4. Drafting MOA & AOA – Prepare Memorandum and Articles of Association as per Section 8 guidelines.
5. Application for License – File Form INC-12 with the RoC to obtain the Central Government’s license under Section 8, as required under Rule 19 of the Companies (Incorporation) Rules, 2014.
6. Incorporation Filing – Submit SPICe+ Part A & B, INC-32, INC-33 (e-MOA), and INC-34 (e-AOA) with the RoC.
7. Certificate of Incorporation – After verification, the RoC will issue the Certificate of Incorporation along with a license under Section 8.

Documents

For Directors/Shareholders

• PAN Card
• Aadhaar Card/Voter ID/Passport/Driving License
• Passport-size Photograph
• Email ID and Mobile Number

For Registered Office

• Electricity/Water bill (not older than 2 months)
• Rent Agreement (if rented)
• NOC from owner (if rented)
• Property ownership document (if owned)

Additional Documents

• Project Report detailing proposed activities
• Estimated income & expenditure for the next 3 years
• INC-14: Declaration from a professional (CA/CS/CMA)
• INC-15: Declaration from all promoters stating the intent is charitable and not for personal profit.

Fee

The cost of Section 8 Company registration depends on various factors: -

• Incorporation Filing Fee: Nil to minimal for Section 8 companies as per MCA norms.
• License Application Fee (INC-12): ₹2,000 (subject to change based on authorized capital).
• Stamp Duty: Varies by state and is often either nil or significantly reduced for Section 8 companies, depending on the jurisdiction.

Note: Professional and legal consultation fees are separate and vary based on service provider.

Timeline

The registration of a Section 8 Company typically takes 15–20 working days. Obtaining the Digital Signature Certificate (DSC) takes 1–2 days, name approval takes 2–3 days, and license approval via Form INC-12 takes around 7–10 days. Final incorporation through SPICe+ forms takes another 3–5 working days after license approval.

FAQs