A Section 8 Company is a non-profit organization that aims to promote charitable activities, art, science, education, and sports. The profits of such companies are utilized for promoting these objectives and are not distributed among the Company's members. It is essential to understand what is Section 8 company, document requirements, and company incorporation process.

At IndiaFilings, we provide end-to-end services for registering Section 8 companies in India. Our team of experts offers hassle-free and professional services to help you establish a Section 8 company quickly and efficiently. Contact us today to avail of our professional services for registering your Section 8 Company in India.

What is Section 8 Company? - Companies Act, 2013

According to the Companies Act 2013, a Section 8 company is defined as an organization whose objectives are to promote arts, commerce, science, research, education, sports, charity, social welfare, religion, environmental protection, or other similar activities goals. These entities utilize their profits to achieve their mission and do not distribute dividends to their shareholders.

Overview of Section 8 Company Registration

A Section 8 Company is a type of corporation established to promote non-profit activities, such as education, social welfare, environment preservation, arts, sports, charity, and more. This follows the provisions of the Companies Act 2013.

The essential purpose of registering a Section 8 Company is to encourage non-profitable goals, including but not limited to trade, arts, commerce, education, charity, environmental protection, sports research, and social welfare. To register a Section 8 Company, a minimum of two directors are required, and there is no requirement for a minimum paid-up capital to set up such a company.

Key Points about Section 8 Company Act

In India, Non-Governmental Organizations (NGOs) can be registered under the Registrar of Societies or as a non-profit entity under Section 8 Company of the Companies Act, 2013.
Profit generated by Section 8 Companies cannot be used for purposes other than charitable objectives and cannot be distributed among shareholders.
Section 8 Companies are similar to the erstwhile Section 25 Company under the Company Act 1956. As per the prevailing Company Act, these are now recognized as Section 8 Companies.
Section 8 Companies are required to comply with the provisions of the Companies Act 2013. They are mandated to maintain books of accounts, file returns with the Registrar of Companies (ROCs), and comply with GST and IT Act.
Any changes to the charter documents like the Articles of Association (AoA) and Memorandum of Association (MoA) require the government's consent.

Benefits of Opening a Section 8 Company in India

Incorporating a Section 8 company in India offers numerous advantages, some highlighted below.

Tax Exemption

Section 8 companies registered under section 12AA of the Income Tax Act are eligible for a 100% tax exemption, as they utilize their profits for charitable purposes. This is a significant benefit as the profits generated by such entities are non-taxable.

No Minimum Capital Requirement

Unlike public limited companies, Section 8 entities do not have a minimum capital requirement. They can adjust their capital structure according to their growth, giving them more flexibility.

Separate Legal Entity

Section 8 companies have a separate legal identity and perpetual existence, just like other registered companies. This increases their credibility and provides them with more autonomy and legal standing.

Increased Credibility

Section 8 companies are subject to strict legal compliance frameworks, enhancing their credibility regarding legal standing. Unlike NGOs and trusts, Section 8 entities follow stringent compliances post-registration, making them more trustworthy.

No Title Required

Section 8 companies are free to choose a name that suits their liking during the registration process. Unlike other registered structures, they are not required to affix the term "Section 8" after their name.

A Section 8 company in India offers numerous benefits, including tax exemption, no minimum capital requirement, no need to pay stamp duty, separate legal identity, increased credibility, and no title required. These advantages make Section 8 companies attractive for entrepreneurs looking to start a business with a charitable or social cause.

Eligibility Criteria for Incorporation of the Section 8 Company

Specific eligibility criteria must be met to establish a Section 8 company in India.

An Indian national or Hindu Undivided Family (HUF) can incorporate a Section 8 Company.
The entity must have at least one director.
The primary object of the Section 8 Company Act should be related to promoting art and science, sports, charitable activities, education, or providing financial assistance to individuals from lower-income groups.

These eligibility criteria ensure that the Section 8 Company operates to promote social welfare and contribute to the greater good of society.

Mandatory legal requirements for Section 8 Company

Before applying for the incorporation process of a Section 8 company in India, specific legal requisites must be fulfilled. These requirements are as follows:

Number of Directors

A minimum of two directors is required if the Section 8 entity intends to operate as a private limited company. However, a minimum of three directors are required if the entity aims to operate as a public limited company.

Number of Members

If the Section 8 Company Act aims to function as a private limited company, the number of members is capped at 200 by the Ministry of Corporate Affairs (MCA). However, there is no such limit for Section 8 entities with a business structure like a public limited company.

Capital Requirement and Name

According to the Companies Act 2013, Section 8 entities are not required to maintain a minimum paid-up capital. Moreover, NGOs operating as Section 8 entities are not obligated to affix terms like private limited or limited in their name.

Company Objects

Only entities with non-profit objectives are eligible for Section 8 registration. The Memorandum of Association and Articles of Association must clearly state such goals for which the Company is established. Any profits the Section 8 entity generates must be utilized for charitable purposes or reinvested in the entity. The profit of Section 8 entities is not available to its members in any form. These legal requisites ensure that Section 8 companies operate with transparency and the intended purpose of promoting social welfare.

Documents Required for Section 8 Company Incorporation

The following documents are required to complete the incorporation process for a Section 8 company in India:

Articles of Association (AOA) and Memorandum of Association (MOA)
Declaration by the first director(s) and subscriber(s) (an affidavit is not required)
Proof of office address, such as a copy of utility bills like electricity, water, or gas bill
Copy of the certificate of incorporation (COI) of an overseas corporate body (if any)
A resolution passed by the promoter company
Consent of Nominee (INC-3)
Residential and identity proof of nominees and subscribers
Applicant's identity and residential proof
Digital Signature Certificate (DSC)
Declaration of unregistered companies.

By providing these documents, you can ensure smooth and efficient Section 8 company incorporation processes.

Section 8 Company Incorporation Process

The process of incorporating Section 8 companies in India involves the following steps:

Step 1: Obtain Digital Signature Certificate (DSC)

The first step is to obtain a Digital Signature Certificate (DSC) for the proposed directors of the Section 8 Company. This certificate is required for the online filing of documents with the Ministry of Corporate Affairs (MCA). Form DIR-3 is used for obtaining the DIN and should be filed along with the DSC of the proposed directors.

Forms to be used: DIR-3, DSC

Step 2: Obtain Director Identification Number (DIN)

After obtaining the DSC, the next step is to apply for a Director Identification Number (DIN) for the proposed directors. The DIN number is a unique identification number issued by the MCA to individuals who wish to be directors of a company in India.

Forms to be used: DIR-3

Step 3: Reserve the Company Name

The next step is to reserve the name of the proposed Company with the MCA. The Section 8 company name should be unique and not be similar to any existing company name. Form INC-1 is used for reserving the company name.

Forms to be used: INC-1

Step 4: File the Application for Incorporation

After the company name is approved, the next step is to apply for Section 8 Company incorporation. The application for incorporation is filed in Form INC-32 along with the Company's Memorandum of Association (MOA) and Articles of Association (AOA).

Forms to be used: INC-32, MOA, and AOA

Step 5: Obtain a License for Section 8 Company

Once the application for incorporation is approved, the next step is to obtain a license for the Section 8 Company. Form INC-12 is used for obtaining the license. It should be filed along with the necessary documents.

Forms to be used: INC-12

Step 6: Obtain a Certificate of Incorporation

After obtaining the license, the MCA issues a Certificate of Incorporation in Form INC-16. This certificate confirms the incorporation of the Section 8 Company.

Forms to be used: INC-16

In summary, the forms used for Section 8 Company registration are DIR-3, DSC, INC-1, INC-32, MOA, AOA, INC-12, and INC-16.

Donations/Funding of Section 8 Company

A Section 8 Company cannot collect capital through deposits but can accept donations from the public. Several methods are available to raise funds, such as foreign donations, equity funding, and domestic donations.

Foreign contributions are permissible only if FCRA registration is obtained, which can be applied for three years after registration.
If immediate foreign contributions are required, prior permission from the commissioner can be requested.
Equity funding can be achieved by releasing new equity shares at a premium price. Domestic subsidies have no restrictions, but it is vital to establish a comprehensive system to prevent money laundering.

Streamline Section 8 Company Registration with IndiaFilings

IndiaFilings is a trusted partner for entrepreneurs and organizations looking to obtain Section 8 company registration in India. With our expertise and seamless online platform, IndiaFilings simplifies the complex process of registering a Section 8 company, ensuring that all legal formalities are met. Our dedicated team of professionals guides clients through the entire registration procedure, from documentation to approval, and helps you establish non-profit organizations that can work towards social welfare and charitable activities.

Features	Proprietorship	Partnership	LLP	Company
Definition	Unregistered type of business entity managed by one single person	A formal agreement between two or more parties to manage and operate a business	A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company.	Registered type of entity with limited liability to the owners and shareholders
Ownership	Sole Ownership	Min 2 Partners Max 50 Partners	Designated Partners	Min 2 Directors Min 2 Shareholders Max 15 Directors Max 200 Shareholders For One Person Company 1 Director 1 Nominee Director
Registration Time	7-9 working days
Promoter Liability	Unlimited Liability	Limited Liability
Documentation	MSME GST Registration	Partnership Deed	LLP Deed Incorporation Certificate	MOA AOA Incorporation Certificate
Governance	-	Under Partnership Act	LLP Act, 2008	Under Companies Act,2013
Transferability	Non Transferable	Transferable if registered under ROF	Transferable
Compliance Requirements	Income tax filing if turnover is more than Rs.2.5 lakhs	ITR 5	Form 11 Form 8 ITR 5	ITR 6 MCA filing Auditor'sappointment Know More

Features

Definition

Unregistered type of business entity managed by one single person

A formal agreement between two or more parties to manage and operate a business

A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company.

Registered type of entity with limited liability to the owners and shareholders

Ownership

Sole Ownership

Min 2 Partners
Max 50 Partners

Designated Partners

Min 2 Directors
Min 2 Shareholders
Max 15 Directors
Max 200 Shareholders

For One Person Company

1 Director
1 Nominee Director

Registration Time

7-9 working days

Promoter Liability

Unlimited Liability

Limited Liability

Documentation

Partnership Deed

LLP Deed
Incorporation Certificate

Governance

Under Partnership Act

LLP Act, 2008

Under Companies Act,2013

Transferability

Non Transferable

Transferable if registered under ROF

Transferable

Compliance Requirements

Income tax filing if turnover is more than Rs.2.5 lakhs

ITR 5

Know More

Form	Company Compliance	Due date	Penalty
COB Filing	Commence of Business Certificate	To be filed before 180 days of company Incorporation	Rs.50,000 for non-compliance
DIR 3 EKYC	Any director with DIN	Before 30th September every year	Deactivation of the DIN A late filing fee of Rs.5,000 Disqualification of the Directors
Form ADT 1	Appointment of auditor	Within 15 days from the date of appointment of the Auditor	Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form AOC 4	Filing financial statements of the company	30 days from the conclusion of the AGM	Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form MGT 7	Annual Returns of the Company	60 days from the conclusion of the AGM

Form

Company Compliance

Due date

Penalty

COB Filing

Commence of Business Certificate

To be filed before 180 days of company Incorporation

Rs.50,000 for non-compliance

DIR 3 EKYC

Any director with DIN

Before 30th September every year

Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Directors

Form ADT 1

Appointment of auditor

Within 15 days from the date of appointment of the Auditor

Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.

Form AOC 4

Filing financial statements of the company

30 days from the conclusion of the AGM

Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.

Form MGT 7

Annual Returns of the Company

60 days from the conclusion of the AGM

Form	LLP Compliance	Due date	Penalty
DIR 3 KYC	For every designated partners of a limited liability partnership (LLP) with DIN	Before 30th September every year	Deactivation of the DIN A late filing fee of Rs.5,000 Disqualification of the Partners
Form 11	Annual Returns	May 30th every year	Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.
Form 8	Statements of Accounts and Solvency	30th October every year	Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.

Form

LLP Compliance

Due date

Penalty

DIR 3 KYC

For every designated partners of a limited liability partnership (LLP) with DIN

Before 30th September every year

Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Partners

Form 11

Annual Returns

May 30th every year

Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.

Form 8

Statements of Accounts and Solvency

30th October every year

Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.

Entity	Form	Due date
Private Limited Company	Annual Return (Form MGT-7)	60 days from the conclusion of the AGM or 28th November 2024 (Which Ever is Earlier)
Financial Statements (Form AOC-4)	29th October 2024
DIR-3 KYC	30th September 2024
Form DPT-3	30th June 2024
Form ADT-1	15th October 2024
ITR 6 (Non audit case)	31st July 2024
ITR 6 (Audit Cases)	31st October 2024
GSTR 9	31st Dec 2024
Limited Liability Partnership	ITR 5 (Non audit case)	31st July 2024
ITR Form 5 (Audit case)	30th September 2024
Annual return - Form 11	30 May 2024
Financial Statements - Form 8	30 October 2024

Entity

Form

Due date

Private Limited Company

Annual Return (Form MGT-7)

60 days from the conclusion of the AGM or 28th November 2024 (Which Ever is Earlier)

Financial Statements (Form AOC-4)

29th October 2024

DIR-3 KYC

30th September 2024

Form DPT-3

30th June 2024

Form ADT-1

15th October 2024

ITR 6 (Non audit case)

31st July 2024

ITR 6 (Audit Cases)

31st October 2024

GSTR 9

31st Dec 2024

Limited Liability Partnership

ITR 5 (Non audit case)

31st July 2024

ITR Form 5 (Audit case)

30th September 2024

Annual return - Form 11

30 May 2024

Financial Statements - Form 8

30 October 2024

Section 8 Company FAQ's

What is a Section 8 company?

It is a type of not-for-profit company set up for the promotion of art, science, commerce, charity, sports, education, research, or any other useful activity. These companies are typically formed to benefit a specific community or purpose and are excluded from the provisions of the Companies Act, 2013 that generally apply to other companies.

Can Section 8 company make profit?

Yes, Section 8 companies can make a profit. Section 8 companies are businesses that receive subsidies from the government to provide services to low-income people. They can also use different ways to gain incomes such as - Investment, Donations, Funding, etc.

What is difference between NGO and Section 8 company?

A Non-Governmental Organization (NGO) is an organization that is independently established and operated, usually with a charitable, educational, religious, or social purpose. NGOs are usually non-profit and do not have a profit motive.
A Section 8 Company is a non-profit organization formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any other such object. Section 8 companies are allowed to generate profit but they must use their profits for the purpose of achieving their goals and not for the benefit of its members.

Do I have to be present in-person to incorporate a Section 8 Company?

No, you will not have to be present at our office or appear at any office for the registration of a Section 8 Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.

What are the documents required for registration?

Identity proof and address proof are mandatory for all the proposed Directors of the Section 8 Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.

How long it will take to incorporate a Company?

IndiaFilings.com can incorporate a Section 8 Company for in 20-30 days. The time taken for registration will depend on the submission of relevant documents by the client and the speed of Government Approvals. To ensure speedy registration, please choose a unique name for your Company and ensure you have all the required documents prior to starting the registration process.

How long is the registration of the Company valid?

Once a Company is incorporated, it will be active and in existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.

What is a Digital Signature Certificate?

A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Section 8 Company.

What is the Director Identification Number?

Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.

Can NRIs /Foreign Nationals be a Director in a Section 8 Company?

Yes, a NRI or Foreign National can be a Director in a Section 8 Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be a Resident India.