Features of a Section 8 Company

Here are some defining characteristics:

• No Minimum Capital Requirement – Unlike other companies, there’s no mandatory capital to start.
• Non-Profit Nature – Profits must be reinvested in the organization’s mission.
• Limited Liability – Members’ liability is limited to the amount they agree to contribute.
• Corporate Legal Status – Section 8 Companies enjoy a distinct legal identity.
• Tax Exemptions – Eligible for various tax benefits and exemptions under the Income Tax Act.
• Government Approval – Requires a license from the Central Government (via MCA).

Benefits of Registering as a Section 8 Company

Forming a Section 8 Company comes with both credibility and practical advantages:

1. High Credibility & Trust

Registered under the MCA, these companies earn public and donor trust more easily than unregistered NGOs or societies.

2. Tax Benefits

Can apply for 12A and 80G registrations to provide tax exemptions to donors and reduce income tax liability.

3. Separate Legal Identity

It can enter into contracts, own assets, and sue or be sued in its own name.

4. Limited Liability Protection

Members aren’t personally liable for the company’s debts.

5. Ease of Fundraising

Eligible to raise foreign donations (via FCRA), CSR funding, and government grants.

6. No Minimum Capital Requirement 

 Unlike other companies, there’s no mandatory capital to start.

7. No Stamp Duty: 

The Section 8 company need not pay the stamp duty imposed on the Memorandum of Association (MOA) or Articles of Association (AOA) of a private or public limited company.

Section 8 Company Registration Eligibility

• An individual, HUF is eligible to start a Section 8 company in India.
• Two or more persons who will act as Directors or shareholders should fulfil all the compliances and requirements of the Section 8 company incorporation under the Act.
• There must be at least one director who should be a resident of India in the Section 8 company. 
• The objective must be one or more of the following – promotion of sports, social welfare, the advancement of science and art, education and financial assistance to lower-income groups.
• Founders, directors, members directors of the company cannot draw any remuneration in any form of cash or kind.
• No profit should be distributed among the members and directors of the company directly or indirectly.

Procedure for incorporation of a Section 8 company

Step 1 –  Obtain DSC and DIN

Obtain a DSC of the proposed Directors of the Section 8 Company. Once a DSC is received, file Form DIR-3 with the ROC for getting a DIN. The Proof of Identity and Address Proof needs to be attached for obtaining DSC. 

Step 2 – Reserve Name

Once the DIR-3 is approved, the ROC will allot a DIN to the proposed director. Apply for name approval on MCA Portal. The name must reflect the company’s charitable purpose.

Step 3 –  File Form INC-12 with the ROC

 Apply for a licence for the Section 8 company along with the  required documents to Regional Director of MCA

Step 4 – License Approval

Once the form is approved, a license under section 8 will be issued in Form INC-16.

Step 5 – File SPICe+ for Incorporation 

After obtaining the license, file the SPICe+ Form with the ROC for incorporation along with the required attachments.

If the ROC is satisfied with the forms submitted, he issues a Certificate of Incorporation along with a unique Company Identification Number (CIN). 

Documents required for Section 8 Company registration:

• Passport Size Photograph of all Directors
• Address proof of all the Directo₹ (Bank statement/Electricity bill/) (not more than 2 months)
• PAN card and Aadhar card of all Director₹
• Identity proof of the all Directo₹(Driving license/ Voter ID card/passport)
• Email id and mobile number of all Directo₹
• Registered office address proof.(Electricity bill/ Telephone bill/Gas Bill) (not more than 2 months)
• Rent Agreement (Company name should be mentioned with complete address) (on ₹ 100 stamp paper with Notary)
• Board resolution authorising Director for GST in the company
• Digital signature certificate of All Director
• DIR-2 of all Directo₹
• NOC (Company name should be mentioned) (on ₹ 100 stamp paper)
• INC-12 
• INC-14 (self attested by CA)
• INC-15 (self attested by All Directors )
• Estimated Annual income and Expenditure of the proposed company ((self attested by CA)

What documents do you get after Section 8 Company registration ?

• Unique Name Approval
• Company PAN & TAN
• Digital Signature Certificate – 2
• Memorandum of Association
• Articles of Association
• Director Identification Number – 2

Who Should Register a Section 8 Company?

Section 8 registration is ideal for:

• Non-Governmental Organizations (NGOs)
• Charitable institutions
• Trusts and societies looking for stronger legal standing
• Social entrepreneurs building impact-driven startups
• Organizations applying for CSR funding from corporates
• Groups seeking international recognition and donor trust

Post-Registration Compliances

• Annual filing of financial statements and returns with RoC
• Obtaining 12A and 80G registrations for tax exemptions
• CSR compliance if applicable
• Maintaining proper books of accounts and audited financials