Overview
A Section 8 Company is a not-for-profit organisation registered under Section 8 of the Companies Act, 2013. It is formed to promote objects such as commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other useful object. Any profit or income earned must be applied solely towards promoting these objects, and dividends cannot be distributed to its members.This structure is suited to NGOs, charitable trusts, foundations and associations that want the credibility and legal standing of an incorporated company while operating on a non-profit basis. It is registered with the Ministry of Corporate Affairs (MCA) and is the company-form alternative to a charitable trust or a registered society.
Registration is required because it gives the organisation a separate legal identity, limited liability for members, and greater trust among donors, government bodies and grant-making institutions. A Section 8 Company also enjoys relaxed compliance in some areas and is permitted to drop the suffix "Limited" or "Private Limited" from its name. After incorporation, it can apply for income-tax registrations under Sections 12AB and 80G to claim exemptions and offer tax benefits to donors.
Documents Required
Only PAN Card and Aadhaar Card are mandatory; the rest are optional.- PAN Card
- Aadhaar Card
- Passport-size Photograph
- Address Proof (Utility / Electricity Bill)
- Bank Statement
- No Objection Certificate (NOC) from the property owner
- Rent Agreement (if premises are rented)
- Digital Signature Certificate (DSC) for at least one director
- Drafted Memorandum of Association (MOA) in Form INC-13
- Drafted Articles of Association (AOA)
Penalties for Non-Compliance
A Section 8 Company must operate strictly within its charitable objects and meet its annual filing and statutory obligations. Failure to do so can attract serious consequences under the Companies Act, 2013.Revocation of licence: The Central Government may revoke the Section 8 licence if the company contravenes any condition of the licence, conducts its affairs fraudulently, or operates in a manner against its objects or the public interest. The company is given a reasonable opportunity of being heard before any such order.
Monetary penalty: If a company fails to comply with the requirements of Section 8, the company is liable to a fine ranging from ₹10 lakh to ₹1 crore, and the directors and officers in default are liable to a fine ranging from ₹25,000 to ₹25 lakh.
Action for fraud: Where the affairs of the company are conducted fraudulently, the officers in default may also face action under Section 447 of the Companies Act, which deals with punishment for fraud.
On revocation of the licence, the Central Government may, in the public interest, order the company to be wound up or amalgamated with another Section 8 Company having similar objects. Routine defaults such as non-filing of annual returns and financial statements also attract late fees and penalties as per prevailing MCA norms.
Section and Certificate
A Section 8 Company is incorporated and licensed under Section 8 of the Companies Act, 2013 (which corresponds to the erstwhile Section 25 of the Companies Act, 1956).The licence to operate as a Section 8 Company is granted by the Registrar of Companies (ROC) on behalf of the Central Government. Under the simplified procedure, the application for the licence and for incorporation is processed together through the SPICe+ form. On approval, the company receives a Certificate of Incorporation along with a Corporate Identification Number (CIN), confirming its status as a registered not-for-profit company.
After incorporation, the company may further apply for registration under Section 12AB and Section 80G of the Income-tax Act to avail tax exemptions and enable donors to claim deductions, subject to fulfilling the relevant conditions.
Eligibility
To register a Section 8 Company in India, the following conditions must be met:- The objects of the company must be charitable or not-for-profit in nature, such as promoting commerce, art, science, sports, education, research, social welfare, religion, charity or environmental protection.
- Any profits or income must be applied only towards promoting these objects, with no distribution of dividends to members.
- A minimum of two directors is required for a private limited structure and three directors for a public limited structure; there is no upper limit on members.
- At least one director must be a resident of India (having stayed in India for the required number of days in the previous financial year).
- An individual, an association of persons, or a body corporate may apply, provided the objects are confirmed to the satisfaction of the Central Government.
- There is no minimum paid-up capital requirement for a Section 8 Company.
- A registered office address in India is required.
Forms Required
Section 8 Company incorporation is filed online with the MCA. The key forms involved are:- SPICe+ (Part A) – reservation of the proposed company name.
- SPICe+ (Part B) – the integrated application for incorporation along with the Section 8 licence.
- INC-13 – e-Memorandum of Association (MOA) in the prescribed format for a Section 8 Company.
- INC-31 – e-Articles of Association (AOA).
- INC-14 – declaration by a practising Chartered Accountant, Company Secretary, Cost Accountant or Advocate that the MOA and AOA comply with Section 8 requirements.
- INC-15 – declaration by each subscriber/member to the memorandum.
- AGILE-PRO-S – application for GST, EPFO, ESIC, professional tax (where applicable) and bank account opening.
How to Apply
Getting your Section 8 Company registered through TaxoSure is simple and fully online. Just follow these steps:- Visit TaxoSure. Go to taxosure.com and open the Section 8 Company Registration service page.
- Login or Register. Create your free TaxoSure account, or simply log in if you already have one.
- Upload your documents. Upload your documents on this page. Your KYC documents (PAN & Aadhaar) are auto-filled from your account; upload the remaining documents as per the checklist.
- Submit your application. Submit your Section 8 Company Registration application in just one click.
- Talk to our consultant. Our consultant connects with you on WhatsApp / Call to confirm the details, share the pricing and begin the work.
- Get your registration. Our experts complete the entire process and deliver your Certificate of Incorporation and Section 8 licence (along with the CIN) to you.
FAQs
What is a Section 8 Company?+
A Section 8 Company is a not-for-profit company registered under Section 8 of the Companies Act, 2013, formed to promote objects such as charity, education, science, art, sports, social welfare or environmental protection. Its profits are reinvested into its objects and cannot be distributed as dividends to members.
How is a Section 8 Company different from a trust or society?+
A Section 8 Company is registered with the Ministry of Corporate Affairs under the Companies Act and is governed nationally, giving it greater credibility and a uniform legal framework. Trusts and societies are registered under state-specific laws. A Section 8 Company generally offers stronger governance, transparency and donor confidence, though it has higher compliance requirements.
How many directors and members are needed to register a Section 8 Company?+
A minimum of two directors is required for a private limited Section 8 Company and three directors for a public limited one. At least one director must be a resident of India. There is no upper limit on the number of members, and no minimum capital is prescribed.
Is there a minimum capital requirement for a Section 8 Company?+
No. There is no minimum paid-up capital requirement for a Section 8 Company. The capital can be decided based on the organisation's needs and contributed by its members.
Can a Section 8 Company claim tax exemptions?+
Yes. After incorporation, a Section 8 Company can apply for registration under Section 12AB of the Income-tax Act to claim exemption on its income, and under Section 80G so that donors can claim deductions on their donations, subject to meeting the applicable conditions.
What happens if a Section 8 Company does not comply with its conditions?+
Non-compliance can lead to revocation of the Section 8 licence by the Central Government, a fine on the company ranging from ₹10 lakh to ₹1 crore, and a fine on the directors and officers in default ranging from ₹25,000 to ₹25 lakh. Where affairs are conducted fraudulently, action may also be taken under Section 447 for fraud.