Section-8 Company Registration
NGO Registration in India.
A Section 8 Company in India is a non-profit organization formed with the objective of promoting arts, science, commerce, education, charity, or any other social cause. Governed by the Companies Act, 2013, these companies enjoy certain privileges and exemptions from tax and compliance requirements. Unlike other companies, Section 8 Companies do not distribute profits to their members but reinvest them to further their objectives.
To register a Section 8 Company, the applicant must apply to the Registrar of Companies (ROC) with a detailed memorandum outlining the purpose and objectives of the organization. The company must have a minimum of two directors, and it can be registered as either a private limited or public limited company. Approval from the Central Government, through the ROC, is required before incorporation.
Once registered, the company is entitled to various tax benefits under the Income Tax Act and can also receive foreign contributions, subject to FCRA approval. Section 8 Companies are ideal for NGOs, trusts, or societies looking to formalize their structure with legal recognition and enhanced credibility, enabling them to raise funds and build partnerships effectively.
Section-8 Company Registration With Onecall Tax Solution
Benefits of Section-8 Company Registration .
Here are the key benefits of Section 8 Company registration in India:
Tax Exemptions: Section 8 Companies are eligible for various tax benefits under the Income Tax Act, including exemptions under sections like 12AA and 80G, which help donors claim deductions on donations.
Separate Legal Entity: Like other companies, a Section 8 Company has a separate legal identity from its members, which means it can own property, open bank accounts, and enter into contracts in its own name.
No Minimum Capital Requirement: There is no mandatory minimum capital requirement for forming a Section 8 Company, offering flexibility to start small and grow gradually.
Credibility and Recognition: Registration under the Companies Act provides higher credibility and transparency, which improves the organization’s image in the eyes of government agencies, donors, and financial institutions.
Limited Liability: The liability of the members is limited to the extent of their shareholding or guarantee amount, protecting personal assets from company liabilities.
Ease of Transfer and Perpetual Existence: Section 8 Companies enjoy perpetual succession and allow easy transfer of ownership, making them more sustainable in the long term.
Who can apply for Section-8 Company Registration.
Individuals or Groups: Any person or group of people above 18 years of age can apply, including Indian citizens, NRIs, and foreign nationals. They must be legally eligible to enter into a contract under Indian law.
Legal Entities: Existing companies, societies, or trusts can also promote or become members of a Section 8 Company, provided they aim to support non-profit objectives.
Minimum Directors Requirement:
Minimum 2 directors for a private limited Section 8 Company.
Minimum 3 directors for a public limited Section 8 Company.
At least one director must be a resident of India.
All applicants must be committed to charitable or social purposes without the intent to earn or distribute profits.
Documents required for Section-8 Company Registration.
| Document | Details |
|---|---|
| ID Proof of Members | Aadhar Card, PAN Card, Passport, Voter ID, or Driving License of all founders/members. |
| Address Proof | Utility bill, rent agreement, or property ownership document for the registered office. |
| Photographs | Passport-sized photos of all members. |
| Memorandum of Association (MoA) | Defines the NGO’s objectives and activities. |
| Rules & Regulations / Bye-laws | Structure, duties of members, meeting procedures, etc. |
| Signature Specimens | Of all governing body members. |
| Digital Signature Certificate (DSC) | Required for signing e-forms during company registration. |
| Director Identification Number (DIN) | Required for all proposed directors of the company. |
| NOC from Property Owner | If the registered office is on rented premises. |
Process of Section-8 Company Registration in India.
FAQs on Section-8 Company Registration.
Any person or group of associated persons intending to register a limited liability company for specific non-profit objectives can apply under Section 8 of the Companies Act, 2013. The following conditions must be satisfied:
Purpose: Promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, environmental protection, or similar objectives.
Application of Income: All profits or income must be applied solely to promote these stated objectives.
No Dividend: The company must strictly prohibit the distribution of dividends to its members.
The registration process for a Section 8 Company usually takes 15 to 30 days, depending on the accuracy of the submitted documents and the time taken for approvals by the Regional Director and Registrar of Companies (ROC). Timely submission and compliance can help speed up the process.
To verify a Section 8 Company, visit the official MCA portal and use the "View Company/LLP Master Data" feature. You can search using the company name or CIN (Corporate Identification Number) to access registration details and status.
Funds can be raised through the following sources:
Donations: Contributions from individuals, philanthropists, or organizations supporting your cause.
Grants: Financial support from government bodies, foundations, or international agencies.
CSR Funding: Funds from companies under their Corporate Social Responsibility obligations.
Membership Fees: Regular fees collected from members or supporters.
Government Schemes: Access to various government funding programs for NGOs and social enterprises.
Foreign Contributions: Allowed only after obtaining FCRA registration and compliance.
Section 8 Companies can avail tax exemptions under Section 12A and Section 80G of the Income Tax Act, provided they meet the required registration and compliance conditions. These exemptions benefit both the company and its donors, as contributions become eligible for tax deductions.