What is a Section 8 Company?
A Section 8 company is a non-profit company registered under Section 8 of the Companies Act, 2013 and licensed by the Ministry of Corporate Affairs. It is the structure NGOs, foundations and charitable organisations use when they want the credibility and governance of a company rather than a trust or society.
Its objects must be charitable or for public good: education, healthcare, poverty relief, art, science, sports, research, religion, social welfare or protection of the environment. Any income it earns has to be applied to those objects, and no dividend can be paid to its members.
Advantages of a Section 8 Company
- No minimum capital requirement
- The name does not need "Limited" or "Private Limited"; it can end with words like Foundation, Association, Council or Federation
- Higher credibility with CSR funders, government bodies and foreign donors than a trust or society
- Eligible for income tax exemption and donor deductions once registered under Sections 12AB and 80G
- Separate legal entity with perpetual succession, so it outlives changes in founders or directors
Who Can Register a Section 8 Company in Bangalore?
Any two or more individuals or companies can apply. A private Section 8 company needs at least two directors and two members; a public one needs at least three directors and seven members. At least one director must be resident in India. Foreign nationals and NRIs can be directors, but their documents must be notarised or apostilled and a passport is compulsory.
Documents Required
- PAN, Aadhaar and a photograph of every director and member
- Address proof of the directors (bank statement or utility bill)
- Proof of the registered office address and a no-objection certificate from the owner
- Estimated income and expenditure for the next three years
- Objects of the organisation and how income will be applied
Registration Process
- Digital signatures (DSC) for the proposed directors
- Name reservation on the MCA portal
- Drafting the Memorandum (MoA) and Articles (AoA) in the Section 8 format
- Filing the licence and incorporation application with the Registrar of Companies
- Certificate of Incorporation with CIN, PAN and TAN
Package Inclusions
- Digital signatures and DIN for directors
- Name approval
- MoA and AoA drafting
- Section 8 licence and Certificate of Incorporation
- PAN and TAN
- Bank account opening support
After incorporation we can also file your 12AB and 80G applications and handle annual ROC and audit compliance.
Frequently Asked Questions
What is a Section 8 company?
A Section 8 company is a non-profit company registered under Section 8 of the Companies Act, 2013. It is formed to promote objects such as education, charity, art, science, sports, research, social welfare, religion or environmental protection. Any surplus must be used for those objects, and no dividend can be paid to members.
How many directors and how much capital are needed for a Section 8 company?
A private Section 8 company needs at least two directors and two members, and a public one needs at least three directors and seven members. There is no minimum paid-up capital requirement.
Can a Section 8 company earn a profit?
Yes. A Section 8 company can run activities that generate income, but every rupee of surplus has to be applied to its charitable objects. Profits cannot be distributed to members as dividend or otherwise.
Is a Section 8 company exempt from income tax?
Not automatically. To claim exemption the company must separately register under Section 12AB of the Income Tax Act, and register under Section 80G if donors are to get a tax deduction. CompanyFX can file both applications after incorporation.
What is the difference between a Section 8 company, a trust and a society?
A trust is governed by trust law and a society by the state Societies Registration Act, while a Section 8 company is regulated by the Ministry of Corporate Affairs. The Section 8 structure has stricter governance and filing rules, which is why CSR funders, foreign donors and institutions often prefer it.
How long does Section 8 company registration take?
Once documents and digital signatures are ready, the licence and incorporation are usually approved within two to four weeks, depending on how quickly the Registrar of Companies processes the application and whether any resubmission is requested.
What are the annual compliances for a Section 8 company?
A Section 8 company must have its accounts audited by a chartered accountant, hold board and annual general meetings, file its financial statements (AOC-4) and annual return (MGT-7) with the ROC, and file its income tax return every year.
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