Section 8 Company Registration: Complete Guide for NGOs

What Is a Section 8 Company?

A Section 8 Company is a non-profit organisation registered under Section 8 of the Companies Act, 2013 (previously Section 25 under the Companies Act, 1956). It is established for promoting charitable objectives such as commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other useful object.

The key feature of a Section 8 Company is that its profits are applied solely towards promoting its objectives—no dividend is paid to its members. It enjoys the credibility and governance framework of a company while operating as a non-profit entity.

Eligible Objectives for Section 8 Company

A Section 8 Company can be formed for any of the following objectives:

• Promotion of education and literacy
• Advancement of science, technology, and research
• Promotion of art, culture, and heritage
• Social welfare and community development
• Environmental protection and sustainability
• Promotion of sports and recreation
• Charitable purposes including poverty alleviation
• Protection of trade and commerce
• Religion and spirituality
• Any other useful object approved by the Central Government

Section 8 Company vs Trust vs Society

Advantages of Section 8 Company

• No minimum capital requirement: Can be incorporated without any minimum paid-up capital.
• Exemption from stamp duty: MOA and AOA are exempt from stamp duty in most states.
• No "Limited" suffix: Can use its name without the words "Limited" or "Private Limited".
• Tax exemptions: Eligible for income tax exemptions under Sections 12A and 80G of the Income Tax Act.
• Higher credibility: Being regulated by the Companies Act provides greater transparency and trust among donors and stakeholders.
• FCRA Registration: Eligible to receive foreign contributions after obtaining FCRA registration.
• Separate legal identity: Can own property, enter contracts, sue and be sued in its own name.

Registration Process: Step-by-Step

Step 1: Obtain Digital Signature Certificate (DSC)

All proposed directors of the Section 8 Company need a Class 3 DSC from an authorised certifying agency. This is required to digitally sign the incorporation forms filed on the MCA portal.

Step 2: Apply for Director Identification Number (DIN)

Each director must have a DIN (Director Identification Number). This can be obtained as part of the SPICe+ incorporation form or separately via the DIR-3 form.

Step 3: Name Reservation

Apply for name reservation through the RUN (Reserve Unique Name) service on the MCA portal. The name should reflect the charitable purpose. You can propose up to 2 names. Avoid names that resemble existing companies or trademarks.

Step 4: Apply for INC-12 Licence

This is the most critical step unique to Section 8 companies. File Form INC-12 with the ROC to obtain a licence under Section 8. The following documents must be attached:

• Draft Memorandum of Association (MOA) in Form INC-13
• Draft Articles of Association (AOA)
• Estimated income and expenditure statement for 3 years
• Declaration by each director in Form INC-14 (by a practicing CA/CS/CWA)
• Declaration by each subscriber in Form INC-15

The ROC processes the application and may direct publication in a newspaper inviting objections. If no objections are received, the licence is issued.

Step 5: File SPICe+ for Incorporation

After receiving the INC-12 licence, file the SPICe+ form for incorporation. Attach the licence number, MOA (INC-13), AOA, and other required documents.

Step 6: Receive Certificate of Incorporation

Upon approval, the ROC issues the Certificate of Incorporation along with PAN and TAN. The company is now legally formed and can commence its charitable activities.

Documents Required

Post-Incorporation Compliance

Section 8 companies must comply with the following:

• 12A Registration: Apply to the Income Tax Department for tax exemption on income used for charitable purposes.
• 80G Registration: Apply so that donors can claim tax deductions on donations made to the company.
• Annual Filings: File AOC-4 (financial statements) and MGT-7 (annual return) with ROC every year.
• Board Meetings: Hold at least 4 board meetings per year.
• Statutory Audit: Mandatory annual audit by a Chartered Accountant.
• Income Tax Return: File ITR-7 annually.
• FCRA Registration: If planning to receive foreign donations, apply for FCRA registration with the Ministry of Home Affairs.

Tax Benefits of Section 8 Company

• Section 12A: Income used for charitable purposes is exempt from income tax.
• Section 80G: Donors get 50% or 100% deduction on donations (depending on the notification).
• GST Exemptions: Certain charitable services are exempt from GST.
• CSR Funds: Section 8 companies are eligible to receive Corporate Social Responsibility (CSR) funds from corporates.

How The Ledger Company Can Help

Registering a Section 8 Company involves a multi-step process including licence application, MOA/AOA drafting, and ROC filings. The Ledger Company provides comprehensive Section 8 Company registration services—from DSC and DIN procurement to INC-12 licence application and SPICe+ filing. We also assist with 12A/80G registration, FCRA registration, and ongoing annual compliance. Our team ensures your non-profit is set up efficiently and remains compliant. Contact The Ledger Company to register your Section 8 Company and start making a difference.