Section 8 Company Registration

What is a Section 8 Company?

A Section 8 Company is a type of not-for-profit organization established under the Companies Act, designed to promote objectives such as charity, education, commerce, art, science, sports, research, social welfare, and environmental protection. The profits generated by a Section 8 Company are exclusively used to achieve the company’s objectives and cannot be distributed among its members as dividends.

Benefits of a Section 8 Company

• No Minimum Paid-Up Share Capital: No mandatory capital requirement for incorporation.
• Limited Liability: Members have limited liability, reducing financial risk.
• Credibility: A registered Sec 8 Company enjoys higher credibility among donors and stakeholders.
• Separate Legal Entity: Operates as a distinct legal entity from its members.
• Tax Exemptions: Eligible for income tax exemptions under Sections 12A and 80G of the Income Tax Act.
• No Distribution of Profit: Profits are reinvested to fulfill the company’s objectives.
• Grants and Funding: Eligible to receive government grants and funding.

Eligibility Criteria for Section 8 Company Registration

• A Private Limited Company requires a minimum of 2 directors, whereas a Public Limited Company requires at least 3 directors.
• At least one director must be an Indian citizen.
• No minimum capital requirement; the company should raise funds adequate to achieve its objectives.
• The company must focus on charitable activities such as education, research, social welfare, etc.

Documents Required for Section 8 Company Registration

For Directors/Shareholders:

• PAN Card (mandatory for Indian citizens).
• Passport (mandatory for foreign nationals).
• Identity Proof (Aadhar Card, Voter ID, or Passport).
• Address Proof (Bank Statement, Utility Bill, etc.).
• Passport-sized photographs.

For the Company:

• Proposed name of the company.
• MOA (Memorandum of Association) and AOA (Articles of Association) outlining objectives and rules.
• Proof of registered office address (Rent Agreement, Electricity Bill, etc.).
• NOC from the property owner.

Step-by-Step Process for Section 8 Company Registration

1. Obtaining DSC:
   Directors must secure a Digital Signature Certificate (DSC) to sign online forms for Section 8 Company Incorporation.

2. Application for DIN (Director Identification Number):
   Directors are required to obtain a Director Identification Number (DIN) and file it with the Ministry of Corporate Affairs (MCA).

3. Name Approval:
   Select a unique name for your Section 8 Company Registration. We assist in filing the name approval application with MCA.

4. Draft MOA and AOA:
   Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), which include the company’s objectives and rules. Our experts ensure these documents comply with MCA regulations.

5. Filing Application with MCA:
   Submit incorporation forms, MOA, AOA, and all relevant documents to the Registrar of Companies (RoC).

6. Incorporation Certificate & License:
   Once approved, the MCA issues the Certificate of Incorporation and a License under Section 8 of the Companies Act, officially establishing your non-profit organization.

Post-Incorporation Compliances for Section 8 Companies

• Annual Filing: File annual returns and financial statements with the Registrar of Companies.
• Income Tax Filing: Ensure timely IT returns and apply for 12A and 80G registrations for tax exemptions.
• Audit: Conduct annual audits of the company’s accounts to comply with regulatory standards.
• GST Registration: Obtain GST registration if applicable and file periodic GST returns.

Registration under Section 12A and 80G for Section 8 Companies

Section 8 Companies engaged in charitable or non-profit activities must obtain Section 12A and Section 80G registrations under the Income Tax Act, 1961 to avail tax benefits and boost credibility among donors.

 What is Section 12A Registration?

Section 12A registration grants income tax exemption to non-profit organizations, including Section 8 Companies.

 Key Benefits:

Exemption from income tax on surplus funds

• Eligibility to apply for grants from government and international bodies

• Required for 80G registration and FCRA approval

 What is Section 80G Registration?

Section 80G registration allows donors to claim deductions on donations made to the organization under their income tax returns.

 Key Benefits:

• Donors get 50% or 100% tax deduction on their donations

• Enhances credibility and trust among individual and corporate donors

• Essential for CSR funding and philanthropic partnerships

 Documents Required for 12A & 80G Registration:

1. PAN of the Section 8 Company

2. Incorporation Certificate and MoA/AoA

3. Section 8 License issued by ROC

4. Details of activities carried out (with evidence like reports, media, photos)

5. Financial statements for past years (if applicable)

6. Bank account details and cancelled cheque

7. Identity & address proofs of directors

8. List of board members with contact details

9. NGO DARPAN ID (if registered on Niti Aayog portal – recommended)

 Application Process:

 Step 1: Prepare and compile all documents

 Step 2: File online application via Form 10A (for new registrations) or 10AB (for renewals/modifications) on the Income Tax Portal

 Step 3: Respond to clarifications (if any) from the Income Tax Department

 Step 4: Get registration certificate (valid for 5 years or provisional for 3 years)