Section 8 Company

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Section 8 Company Registration – Overview

A Section 8 Company is a type of non-profit organisation registered under the Companies Act, 2013 in India. It is formed with the primary objective of promoting activities that serve public or social welfare rather than generating profits for its members.

Objectives of a Section 8 Company

A Section 8 Company can be established to promote one or more of the following causes:

  • Charity

  • Education

  • Science and Research

  • Arts and Culture

  • Social Welfare and Community Development

  • Environmental Protection

  • Religious or Spiritual Activities

Key Feature

Unlike other types of companies, a Section 8 Company does not distribute dividends to its members.
Instead, any profits or surplus earned are reinvested into achieving the organisation’s primary objectives, ensuring continued social and community benefit.

Benefits of a Section 8 Company

A Section 8 Company offers numerous advantages to individuals and groups seeking to establish a non-profit organisation focused on charitable, educational, social, or environmental objectives.
Below are the major benefits:

1. Legal Recognition

Section 8 Company Registration provides formal legal status under the Companies Act, 2013, enhancing the organisation’s credibility. This recognition helps in:

  • Partnering with private and government entities

  • Receiving grants, donations, and sponsorships

  • Accessing financial aid for social and community projects

2. Tax Benefits

Section 8 Companies enjoy several tax exemptions under the Income Tax Act, 1961, including:

  • Section 12A: Income exemption for the company’s charitable activities

  • Section 80G: Tax deductions for donors contributing to the company

These provisions make donations more attractive and increase financial inflows for the organisation.

3. Limited Liability

The members and directors have limited liability, meaning their personal assets are protected from the organisation’s debts and obligations. This ensures financial safety for the management team.

4. No Minimum Capital Requirement

Unlike other company types, there is no minimum paid-up capital requirement to incorporate a Section 8 Company.
This allows founders to start operations without heavy financial investment.

5. Distinct Legal Entity

A Section 8 Company has its own legal identity, separate from its members. It can:

  • Own property

  • Operate bank accounts

  • Enter into contracts

  • Sue or be sued in its own name

6. No Stamp Duty

Section 8 Companies are exempt from stamp duty during incorporation — a benefit not available to other company types.
This reduces registration costs and encourages non-profit formation.

7. Enhanced Credibility

Because they are regulated by the government and operate under strict compliance norms, Section 8 Companies enjoy high credibility among donors, partners, and stakeholders.
Their structure assures that funds are used strictly for social causes.

8. No “Limited” or “Private Limited” Title

Section 8 Companies are not required to use the suffix “Private Limited” or “Limited” in their name.
This distinguishes them from commercial entities and reflects their non-profit nature.

9. Eligibility for Government Grants

These companies are eligible to receive government grants and aid for social and community-based projects, improving their operational strength and outreach capacity.

10. Transferable Ownership

Ownership and management can be transferred smoothly, ensuring continuity and efficient transition without disrupting operations.

11. Exemption to Donors

Donors who contribute to a Section 8 Company can claim tax exemptions under Section 80G, motivating individuals and corporations to participate in philanthropic activities.

12. Low Share Capital Requirement

Since there is no mandatory share capital, organisations can allocate more funds toward charitable activities instead of compliance costs.

13. Perpetual Existence

Section 8 Companies enjoy perpetual succession, meaning their existence is not affected by changes in membership or management.
This ensures long-term sustainability and stability of the organisation.

Forms Required for Section 8 Company Registration

To register a Section 8 Company in India, several forms must be submitted to the Ministry of Corporate Affairs (MCA) as per the Companies Act, 2013. Here’s a detailed list of the required forms and their purpose

Form Name Purpose Details Required Attachments
RUN (Reserve Unique Name) Reserve the company’s name. Proposed name(s) and rationale aligned with the objectives of the company. Objective statement, NOC (if applicable).
Form INC-12 Application for obtaining the Section 8 license. Application for obtaining the Section 8 license. Draft MOA and AOA, declarations (Form INC-14 & INC-15), promoters/directors list, registered office proof.
Form SPICe+ Incorporation of the company, combining multiple registrations. Company details (name, type, category), director/shareholder information, share capital (if applicable). Integrates applications for PAN, TAN, GST, EPFO, and ESIC.
Form DIR-2 Consent of directors to act as directors of the company. Personal details of proposed directors. Copy of PAN, Aadhaar, or Passport of directors.
Form INC-22 Notice of the registered office address (if not provided during incorporation). Address details and supporting documents for the registered office. Proof of address (rent agreement, utility bill, or ownership document), NOC from the owner.
Form INC-9 Declaration by each subscriber and first director that they are not disqualified under the Companies Act. Names and personal details of subscribers and first directors. Automatically generated and included in SPICe+ (e-form).

What is a Private Limited Company (Pvt Ltd)?

A Private Limited Company (Pvt Ltd) is a separate legal entity incorporated under the Companies Act, 2013, that provides limited liability protection to its shareholders.
This means the personal assets of shareholders are safeguarded against the company’s debts and obligations.

A Pvt Ltd company restricts the transfer of shares, ensuring control remains within a small group of individuals, typically the founders or investors.
It must have a registered office address in India and comply with annual filing and governance norms set by the Ministry of Corporate Affairs (MCA).

This structure is ideal for startups, small and medium enterprises (SMEs), and growing businesses seeking:

  • Enhanced credibility

  • Easier access to funding and investors

  • Greater management flexibility and ownership control.

Eligibility Criteria for Registering a Section 8 Company

To establish a Section 8 Company under the Companies Act, 2013, the following eligibility conditions must be met:

1. Purpose/Objective:

The company must be formed with an objective to:

  1. Promote charitable or social welfare activities such as education, science, arts, religion, environmental protection, or any other public benefit activities.
  2. Ensure profits or income are reinvested for the stated objectives and not distributed to members.
2. Number of Members:
  1. Minimum Members: At least two individuals are required for a private Section 8 Company and three for a public Section 8 Company.
  2. There is no upper limit on the number of members.
3. Legal Status of Members:
  1. Individuals or entities (including partnerships, companies, or NGOs) can act as members.
  2. All directors must be Indian residents, though foreign nationals can also be appointed with proper compliance.
4. Directors:
  1. Minimum of two directors for a private company and three directors for a public company.
    1. All directors must hold a Director Identification Number (DIN).
5. Capital Requirements:

There is no minimum capital requirement, but sufficient capital must be declared in the application to achieve the intended objectives.

6. Approval from Authorities:

A unique name must be chosen for the company, which is not identical or similar to existing companies or trademarks. Meeting these requirements is essential before filing the SPICe+ form for incorporation.

7. No Profit Distribution:

The company’s income cannot be distributed as dividends. It must be reinvested in the organization’s objectives.

Documents Required for Incorporating a Section 8 Company

To incorporate a Section 8 Company in India, the following documents are mandatory:

1. Memorandum of Association (MOA)

  • Defines the primary objectives of the company.

  • Must clearly specify the non-profit goals such as charitable, educational, or social purposes.

2. Articles of Association (AOA)

  • Lays down the rules, regulations, and internal governance structure of the company.

  • Specifies how the organization will operate and manage its affairs.

3. Declaration by Directors (Form INC-9)

  • A self-declaration from all directors and subscribers confirming compliance with the Companies Act, 2013 and stating that the company’s purpose is lawful and genuine.

4. Financial Statements

  • Includes projected income and expenditure statements for the next three years.

  • Demonstrates the company’s plan for achieving its non-profit objectives.

5. Affidavits and Declarations

  • Declaration by Professionals: A certification from a Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA) verifying the accuracy of incorporation documents.

  • Affidavit of Non-Conviction: Each director must submit a statement confirming they have not been convicted of any offense and are eligible to act as directors.

This structured pvt ltd company registration ensures limited liability, separate legal entity status, and ease in securing funding from financial institutions. Please note: The registration process for a Private Limited Company typically takes 7 to 10 days.

Documents for Directors and Members

Each director and member of the proposed Section 8 Company must submit the following documents:

1. Identity Proof

  • For Indian Citizens: PAN Card (mandatory)

  • For Foreign Nationals: Valid Passport

2. Address Proof (any one of the following)

  • Aadhaar Card

  • Voter ID

  • Passport

  • Driving License

  • Latest Utility Bill (Electricity, Telephone, or Gas Bill) — not older than 2 months

3. Residential Proof (any one of the following)

  • Latest Bank Statement

  • Mobile Bill or Utility Bill — not older than 2 months

4. Passport-Size Photograph

  • Recent and clear passport-sized photographs of all directors and members.

5. Director Identification Number (DIN)

  • All directors must possess a valid DIN.

  • Those who do not have one must apply for a DIN before incorporation.

6. Digital Signature Certificate (DSC)

  • Every director must have a Digital Signature Certificate (DSC) to sign and submit electronic incorporation forms on the MCA portal.

Documents for Registered Office

Every Section 8 Company must provide valid proof of its registered office address during incorporation. The following documents are required:

1. Ownership Documents (if the premises are owned)

  • Sale Deed or Property Papers in the name of the company.

2. Rental or Lease Agreement (if the premises are rented or leased)

  • A valid Rent or Lease Agreement executed between the company and the property owner.

3. No-Objection Certificate (NOC)

  • A written NOC from the property owner, authorising the use of the premises as the company’s registered office.

4. Utility Bill

  • Latest Electricity Bill, Water Bill, or Property Tax Receipt for the registered address.

  • The bill must be in the owner’s name and not older than 2 months.

Timeline for Private Limited Company Registration

Registering a Private Limited Company in India typically takes 10 to 15 working days, depending on factors such as name availability, document accuracy, and the Ministry of Corporate Affairs (MCA) processing speed.

Below is the step-by-step breakdown of the registration process:

1. Name Approval (3–4 Days)

Reserve your proposed company name through the MCA portal using the RUN (Reserve Unique Name) service or the SPICe+ form.

2. Director Identification Number (DIN) (3 Days)

Obtain a DIN for all proposed directors, which is mandatory to become a part of the company’s board.

3. Digital Signature Certificate (DSC) (2 Days)

Each director must secure a DSC to digitally sign and submit incorporation documents online.

4. Drafting MOA & AOA (2–3 Days)

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) that define the company’s objectives, rules, and internal management structure.

5. Filing Incorporation Documents (5–7 Days)

Submit the SPICe+ Form along with all necessary documents — such as ID proofs, address proofs, and declarations — to the Registrar of Companies (RoC) via the MCA portal.

6. Certificate of Incorporation (2–3 Days)

Once approved, the Registrar of Companies (RoC) issues the Certificate of Incorporation (COI) along with the Company Identification Number (CIN).

⚠️ Note:

Timelines may vary due to:

  • Incomplete or incorrect documentation

  • Name rejection by MCA

  • Government processing delays or public holidays

Other Necessary Documents

  • List of Directors and Subscribers

  • Draft License Application under Section 8 (for Section 8 companies)

  • Details of Proposed Activities or Work the company intends to undertake.

Section 8 Company Registration Process

The Section 8 Company registration process in India is designed to be transparent, structured, and compliant with the Companies Act, 2013. With the introduction of online filing forms like INC-12, INC-13, and INC-16, incorporation has become faster and more efficient.

At A2Z Registration, our team of Chartered Accountants and Company Secretaries ensures that every step is handled smoothly — from document preparation to final approval by the Registrar of Companies (RoC).

Section 8 Company Compliance Requirements

To ensure the smooth and lawful functioning of a Section 8 Company, certain compliance requirements must be followed as per the Companies Act, 2013 and related tax laws. These ensure transparency, accountability, and the continued eligibility for government benefits and exemptions.

1. Annual Filing Requirements

  • Form AOC-4: Submission of the company’s audited financial statements to the Registrar of Companies (RoC).

  • Form MGT-7: Filing of the annual return, containing key details of the company’s structure, management, and shareholders.

2. Board Meetings

  • Conduct at least two board meetings annually for private Section 8 Companies.

  • Public Section 8 Companies must hold a minimum of four board meetings per year, ensuring proper governance and decision-making.

3. Maintaining Financial Transparency

  • Maintain accurate records of income and expenditure to reflect the organization’s charitable and non-profit activities.

  • Keep proper documentation for donations, grants, and other funding sources.

4. Tax Returns

  • File annual income tax returns on time.

  • Ensure compliance with relevant tax exemption provisions, if registered under Section 12A or 80G of the Income Tax Act.

5. Audit Requirements

  • All financial statements must be audited annually by a qualified Chartered Accountant (CA).

  • Audit reports must be filed with the RoC as part of the annual compliance.

6. Compliance Certifications

  • Renew 12A and 80G certifications periodically to continue enjoying tax exemptions for both the organization and its donors.

7. License Renewal

  • Renew the Section 8 license as required by the Ministry of Corporate Affairs (MCA) to ensure continued legal validity of operations.

Conclusion

By adhering to these compliance requirements, a Section 8 Company ensures transparency, accountability, and credibility. Regular filings and audits not only maintain the company’s lawful status but also help retain its tax benefits and donor trust.

Eligibility for Government Schemes and CSR Funding

1. Access to Government Schemes

Section 8 Companies are eligible to receive government grants, financial aid, and incentives designed for non-profit and charitable organizations.
These schemes often support initiatives related to:

  • Education

  • Environment

  • Social welfare

  • Women and child development

  • Rural upliftment

Such funding enables Section 8 Companies to expand their impact and sustain long-term social projects.

2. Access to CSR Funding

Under the Companies Act, 2013, eligible corporations are mandated to spend a portion of their profits on Corporate Social Responsibility (CSR) activities.
Section 8 Companies, due to their non-profit nature and legal recognition, are among the preferred recipients of CSR contributions, helping corporates fulfill their CSR obligations while supporting genuine social causes.

High Public Trust

Section 8 Companies operate under the supervision of the Registrar of Companies (RoC), Ministry of Corporate Affairs, and must adhere to strict compliance and transparency standards, including:

  • Annual audits of financial statements

  • Regular filings with the RoC

  • Proper maintenance of records

This high level of regulatory oversight and accountability builds confidence among:

  • Donors

  • Government bodies

  • Public and private institutions

As a result, Section 8 Companies enjoy a reputation of credibility and trustworthiness, which further enhances fundraising opportunities.

Exemption from Stamp Duty

Section 8 Companies are exempt from paying stamp duty during their registration and incorporation process.
This exemption reduces initial setup costs, making it more affordable for individuals and organizations to start a non-profit entity.

Income Reinvestment for Charitable Objectives

Unlike profit-driven businesses, Section 8 Companies are legally required to reinvest all their profits and surpluses into achieving their charitable or social objectives.
This ensures that every financial gain directly supports:

  • Educational programs

  • Environmental protection

  • Healthcare and welfare initiatives

  • Other social development activities

Penalty for Non-Compliance

If a Section 8 Company violates any provisions of the Companies Act, 2013, such as misuse of funds or deviation from its stated objectives:

  • The license may be revoked by the Central Government.

  • The company and its officers may face penalties, including fines and disqualification.

These provisions maintain the integrity and authenticity of all Section 8 entities.

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