Section 8 Company
A Section 8 Company in India is a non-profit organization established under the Companies Act, 2013, for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, or environmental protection. Profits must be reinvested in the purpose.
What is a Section 8 Company?
A Section 8 Company is a type of non-profit organization registered under the Companies Act, 2013. Its primary purpose is to promote charitable, educational, scientific, artistic, sports, or environmental objectives. These companies do not distribute profits to their members but reinvest them to achieve their stated goals.
Key Benefits of Section 8 Company Registration
Tax Exemption
Section 8 Companies registered under Section 12AA of the Income Tax Act are eligible for complete tax exemption on their income, provided it is used for charitable purposes.
No Minimum Capital Requirement
There is no mandatory minimum capital for incorporation, allowing flexibility in capital structure based on organizational growth and needs.
Separate Legal Entity
A Section 8 Company has an independent legal identity, ensuring continuity and credibility in legal and financial matters.
Greater Credibility
Due to mandatory compliance with regulatory norms, Section 8 Companies gain higher trust and recognition from donors, stakeholders, and government agencies.
No Title Restrictions
Section 8 Companies are not required to use "Private Limited" or "Limited" in their name, offering more freedom in naming the organization.
Who Can Form a Section 8 Company?
- Indian citizens or a Hindu Undivided Family (HUF)
- At least one director is required
- The company’s core objective must be non-profit, focusing on activities like education, environment, sports, arts, or providing aid to underserved communities
Legal Requirements for Incorporation
Number of Directors
A minimum of two directors is required for a private limited Section 8 Company and three for a public limited Section 8 Company.
Number of Members
Private Section 8 Companies can have up to 200 members. There is no upper limit for public Section 8 Companies.
Capital and Name
There is no minimum capital requirement. Companies are also not obligated to use terms like "Private Limited" or "Limited" in their names.
Company Objectives
The Memorandum and Articles of Association must clearly state charitable and non-profit purposes.
Documents Required for Registration
- Memorandum of Association (MOA) and Articles of Association (AOA)
- Proof of registered office address (utility bills)
- Digital Signature Certificate (DSC) for directors
- Director Identification Number (DIN)
- Identity and residential proof of directors and members
- INC-3 (Consent of Nominee, if applicable)
- Declaration by subscribers and directors
- Certificate of incorporation of promoter company (if any)
Step-by-Step Process of Section 8 Company Registration
Step 1: Get Digital Signature Certificate (DSC)
For secure document submission online.
Step 2: Apply for Director Identification Number (DIN)
DIN is required for anyone intending to become a director.
Step 3: Reserve Company Name
File form INC-1 with the MCA to secure a unique company name.
Step 4: File Incorporation Forms
File Form INC-32 along with MOA and AOA.
Step 5: Apply for Section 8 License
Submit Form INC-12 with all required documents to obtain the license.
Step 6: Receive Certificate of Incorporation
Once approved, Form INC-16 is issued by the MCA, confirming the incorporation.
Funding and Donations for Section 8 Companies
- Section 8 Companies can accept public donations, both domestic and foreign.
- Foreign donations require FCRA registration after three years or prior approval for immediate needs.
- Equity funding can be raised by issuing new shares.
- Domestic donations have no restriction but must follow anti-money laundering guidelines.
Section 12AA and 80G Registration
Section 12AA exempts income from tax if used for charitable objectives.
Section 80G allows donors to claim tax deductions, increasing funding opportunities.
Note: 80G registrations for existing Section 8 Companies are valid till March 2025 and must be renewed for AY 2025–2026.
Why Choose Easy My Tax for Section 8 Company Registration?
At Easy My Tax, we offer comprehensive and reliable services to help you register your Section 8 Company with ease. Our team ensures compliance with all legal procedures, from documentation to obtaining necessary approvals, so you can focus on your mission to drive positive social impact.
Start your Section 8 Company registration journey with Easy My Tax today. Let us help you make a difference.
