Section 8 Company Registration
A Section 8 company is the corporate form for charitable and not-for-profit work: limited liability and a recognised name, with profits locked into the objects rather than paid out to members. We obtain the licence from the Registrar and incorporate the company.
What it is
We provide expert consultancy for company registration, GST, ITR filing, and FSSAI certifications, ensuring seamless legal compliance.
Why it matters
Benefits of a Section 8 Company Registration
Tax Exemptions: Section 8 companies can avail of tax exemptions under Section 11 and Section 12 of the Income Tax Act, provided they fulfill the required conditions.
Donor Benefits: Donations made to a Section 8 company are eligible for tax deductions under Section 80G of the Income Tax Act, encouraging people to donate for social causes.
Limited Liability: Like any other company, a Section 8 company offers limited liability protection to its directors and members.
Credibility: Being a registered company, Section 8 companies have more credibility and can attract more support from the public, government, and other organizations.
Perpetual Succession: Section 8 companies enjoy perpetual succession, meaning the company continues to exist even if the members or directors change
Disadvantages of a Section 8 Company
Regulatory Compliance: It must adhere to strict regulatory and compliance requirements under the Companies Act, 2013, which can be cumbersome and time-consuming.
Limited Fundraising: Section 8 companies cannot raise funds by issuing shares or dividends, so they rely primarily on donations, grants, and other non-profit sources.
No Dividend Distribution: The company cannot distribute any surplus profits to its members or shareholders
Why Choose TaxHint Advisors for Section 8 Company Registration?
Our team is well-versed with all legal and regulatory requirements related to Section 8 companies.
We handle all legalities, paperwork, and compliance for you, making the registration process seamless.
We offer competitive and transparent pricing for all our Section 8 company registration services.
From registration to compliance, we offer full support to help your Section 8 company thrive
Documents required
A Section 8 incorporation is a normal company incorporation plus the licence application, and the licence is where the extra documents come in.
- Digital signature certificate for each proposed director, and DIN where already held
- Memorandum in Form INC-13 setting out the charitable objects, and the articles
- Declaration in Form INC-14 by a practising chartered accountant, company secretary or cost accountant that the requirements have been complied with
- Declaration in Form INC-15 by each applicant
- Estimated statement of income and expenditure for the next three years, with the sources of income and the objects the expenditure will be applied to
- PAN, identity proof and address proof for every director and subscriber
- Proof of the registered office with a utility bill not older than two months and a no-objection letter from the owner
- A note on the proposed work and the grounds on which the licence is applied for
How it works
How to Register a Section 8 Company
Obtain Digital Signature (DSC): The directors of the company need to get a digital signature for online submission of documents.
Obtain Director Identification Number (DIN): All directors must obtain a DIN.
Apply for License: The company must apply to the Ministry of Corporate Affairs (MCA) for a license under Section 8 of the Companies Act.
Company Name: The proposed name should be in line with the objective of the organization and should be approved by the MCA.
Draft Memorandum and Articles of Association (MOA/AOA): These documents define the objectives and rules of the organization.
Submit Documents: Submit the necessary documents, such as MOA, AOA, identity proof, address proof, and other relevant documents to the RoC for approval.
Certificate of Incorporation: Upon approval, the RoC will issue a Certificate of Incorporation, and the Section 8 company can begin its operations
Timelines
Name reservation takes two to three working days. The licence and incorporation together, filed through SPICe+ with the Section 8 forms, commonly take twenty to thirty days, and longer if the Registrar raises a query on the objects or on the three-year projections.
Allow further time after incorporation for 12A and 80G registration with the income tax department and for an NGO Darpan Unique ID, both of which are usually the real objective and neither of which can start until the company exists.
Key Features of a Section 8 Company Registration
Non-Profit Objective: The main purpose of forming a Section 8 company is to promote a particular objective like charity, education, art, research, religion, sports, or environmental protection.
No Profit Distribution: The income and profits generated by the Section 8 company cannot be distributed to its members, directors, or shareholders. Instead, the profits are reinvested in furthering the company’s objectives.
Minimum Members: A Section 8 company requires at least 2 directors and 2 members for registration, with no upper limit on the number of members.
Tax Benefits: Section 8 companies enjoy several tax exemptions and concessions under the Income Tax Act. Donations made to Section 8 companies can also be eligible for tax deductions.
Company Structure: It is structured like a regular company, meaning it can have a Board of Directors, shareholders, and employees. However, the activities focus on social welfare, and the company cannot declare dividends.
Legal Status: It enjoys the status of a limited company (like a private limited company or public limited company) with separate legal identity, but the main goal is public benefit rather than profit generation.
Registration: Section 8 companies are registered with the Registrar of Companies (RoC), and they must apply for a license from the Ministry of Corporate Affairs (MCA) before they can commence operations.
Financial Transparency: A Section 8 company must maintain financial transparency by auditing and submitting annual accounts. The company’s records are also open to the public and government agencies for scrutiny.
Government Oversight: While it enjoys several privileges, it is also under the oversight of the Ministry of Corporate Affairs, which ensures that the non-profit organization operates within the bounds of its objectives.
Frequently asked questions
What is a Section 8 company?
A Section 8 company is a non-profit organization registered under the Companies Act, 2013, in India. It is formed with the purpose of promoting activities like charity, education, art, religion, research, social welfare, environmental protection, and similar causes.
Can a Section 8 company distribute profits to its members?
No, a Section 8 company cannot distribute any profits to its members, directors, or shareholders. The profits must be reinvested into the company to further its non-profit objectives.
How many members and directors are required for a Section 8 company?
A Section 8 company requires a minimum of 2 directors and 2 members. There is no upper limit on the number of members.
Can a Section 8 company raise funds?
Yes, a Section 8 company can raise funds through donations, grants, and crowdfunding. However, it cannot raise funds by issuing shares or distributing profits. It is largely dependent on donations and other charitable funding sources
Can a Section 8 company be converted into a profit-making company?
No, a Section 8 company cannot convert into a profit-making company. If it wants to change its objective, it must first surrender its license and re-register as a different type of company, such as a private limited or public limited company.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
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