Introduction: Bridging Purpose with Compliance
India is a land of social innovators, philanthropists, and changemakers. Every year, thousands of initiatives start with a mission to impact society — be it through education, healthcare, environment, or human rights. But doing good legally requires an equally strong legal foundation.
That’s where a Section 8 Company comes into play.
A Section 8 Company is a special type of non-profit company under the Companies Act, 2013, that empowers NGOs, charitable organizations, and social enterprises to operate with credibility, transparency, and tax benefits.
Whether you’re starting an NGO or restructuring your existing trust/society for better governance, this guide covers the legal framework, benefits, registration process, compliance obligations, and why it’s preferred by major donors, CSR funds, and international agencies.
With over 10 years of experience, RegistrationMART helps individuals and organizations across India establish compliant and impactful Section 8 Companies.
What is a Section 8 Company?
A Section 8 Company is a non-profit company formed for the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment, or any other object of general public utility.
- Prohibits the distribution of profits to members
- Utilizes its income solely to promote charitable objects
- Requires a special license from the Central Government (via ROC)
It is governed under Section 8 of the Companies Act, 2013, and enjoys benefits under Income Tax Act and CSR Regulations.
Legal Framework and Key Laws
| Act / Rule | Applicability |
|---|---|
| Companies Act, 2013 (Section 8) | Governs formation, operation, and licensing |
| Income Tax Act, 1961 (Sec 12A, 80G) | Tax exemptions |
| FCRA | If receiving foreign donations |
| CSR Rules (Sec 135) | For receiving corporate CSR funds |
| GST Act | If crossing threshold or engaged in taxable services |
Who Can Register a Section 8 Company?
| Requirement | Details |
|---|---|
| Directors | Minimum 2 for private, 3 for public |
| Members | Minimum 2 (no upper limit) |
| Resident Director | At least 1 must be Indian |
| Profit Distribution | Not allowed |
| Charitable Purpose | Must be clearly defined in MoA |
Foreign nationals/NRIs can also be members or directors with valid ID and address proofs.
Documents Required
For Promoters:
- PAN Card
- Aadhaar/Passport/Voter ID
- Passport-size photo
- Utility Bill or Bank Statement
For Office Address:
- Rent Agreement or Sale Deed
- NOC from Owner
- Electricity or utility bill
Legal Drafts:
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Declaration in Form INC-14 (by CA/CS)
- Form INC-15 (by each subscriber)
Step-by-Step Process for Section 8 Company Registration
- DSC: Class 3 Digital Signature for all directors
- Name Approval (SPICe+ Part A): Choose 2 names reflecting the charitable objective (e.g., “Foundation”, “Federation”)
- Drafting MoA & AoA: Include charitable intent, ban on dividend distribution, etc.
- Filing SPICe+ Part B + AGILE + INC-9: Upload director details, tax IDs, bank info
- File Form INC-12: Attach MoA, AoA, INC-14, INC-15, financial forecast
- Get License (INC-16): Issued by ROC/Central Government
- Final Incorporation: SPICe+ Part B processed and CoI issued
Benefits of Section 8 Company
| Benefit | Description |
|---|---|
| Legal Recognition | Strong corporate structure |
| Tax Exemption | Under 12A and 80G |
| CSR Funding | Eligible for CSR contributions |
| Credibility | Audited and regulated by ROC |
| No Stamp Duty | On MoA and AoA filing |
| Foreign Donations | Can apply for FCRA |
| Limited Liability | Directors not personally liable |
| Perpetual Succession | Continues regardless of member change |
Comparison: Trust vs Society vs Section 8 Company
| Criteria | Section 8 Company | Trust | Society |
|---|---|---|---|
| Law | Companies Act, 2013 | Indian Trusts Act | Societies Registration Act |
| Registration | ROC (MCA) | Charity Commissioner | Registrar of Societies |
| National Validity | Yes | No | No |
| Control | Board of Directors | Trustees | Managing Committee |
| Tax Exemption | Available | Available | Available |
| Credibility | Very High | Medium | Medium |
| FCRA Eligibility | Easier | Moderate | Moderate |
Compliance After Incorporation
| Compliance | Timeline |
|---|---|
| Board Meetings | Minimum 2 per year |
| Statutory Audit | Mandatory |
| Annual Filing | AOC-4, MGT-7 (Yearly) |
| 12A, 80G Registration | Within 6–12 months |
| FCRA Registration | After 3 years (if required) |
| CSR Reporting | In Director’s Report |
Real Case Study
Client: Women Empowerment NGO, Pune
Challenge: Needed legal entity to receive ₹50 lakh CSR grant
Solution: Registered a Section 8 Company with 80G in 3 months
Result: Received CSR funding from listed FMCG company and improved governance
Common Mistakes to Avoid
- Choosing names that violate the Emblems Act
- Mentioning commercial objectives in MoA
- Not applying for 80G/12A in time
- Treating Section 8 like a profit company
- Using donations for unrelated expenses
How to Get 80G and 12A Tax Benefits?
| Certificate | Purpose | Benefit |
|---|---|---|
| 12A | Organization’s income is exempt | No tax on donations received |
| 80G | Tax deduction for donor | Helps attract donations |
Requirements:
- Incorporation Certificate
- MoA, AoA
- Director ID & PAN
- Projected income/expenses
- Details of past activities (if any)
Note: All NGOs must re-register under new rules introduced post-2021.
Why Choose RegistrationMART?
- 10+ years of experience in NGO registration
- Experts in Section 8, Trust, and Society setup
- We handle:
- DSC, DIN, Name Approval
- MoA & AoA Drafting
- ROC & MCA Filings
- INC-12 Licensing
- 80G & 12A Certification
- FCRA Advisory
You focus on your mission — we handle your law.
Conclusion
If you aim to serve society with structure, credibility, and transparency, a Section 8 Company is your best bet. Unlike informal setups, it gives you the legal muscle to raise funds, apply for grants, receive donations, and build long-term public trust.
Whether you’re a founder, trustee, or corporate CSR head — take the next step with confidence. RegistrationMART is here to help.
