Section 8 Company Registration
In short
A Section 8 company is a non-profit company formed to promote objects such as education, charity, social welfare, art, science, sports or environmental protection. It must apply its income to those objects and cannot pay dividends. The licence under Section 8 of the Companies Act, 2013 is obtained as part of the SPICe+ incorporation.
Overview
For NGOs and foundations, a Section 8 company offers a well-regulated structure with a separate legal identity, limited liability and the credibility of MCA oversight. Donors and institutional funders often prefer it to a trust or society.
A Section 8 company does not need "Limited" in its name and is exempt from some requirements that apply to other companies. After incorporation, it can apply separately under the Income-tax law for registration of the charitable entity and approval for donor deductions.
Key requirements
- Charitable or not-for-profit objects that fall within Section 8 of the Companies Act, 2013
- At least two directors and two members for a private Section 8 company (three directors and seven members for a public one)
- A registered office address in India
- A commitment that profits are applied only to the company's objects and no dividend is paid to members
Documents required
- PAN, identity and address proof of directors and members
- Passport-size photographs
- Registered office proof and owner's NOC
- Projected income and expenditure for the next three years and a note on the proposed activities
We share an exact checklist for your case before you start, since requirements vary with the structure and the people involved.
Process
Objects and name
We help frame the charitable objects and reserve a suitable name.
DSC and DIN
Digital signatures are obtained and DINs are allotted.
Documents
We draft the MoA and AoA in the Section 8 format, with the declarations and financial projections required.
SPICe+ filing
The incorporation is filed with the application for the Section 8 licence.
Incorporation
The licence and Certificate of Incorporation are issued with PAN and TAN.
What KNAP Advisory handles
- Drafting of charitable objects
- Name reservation
- MoA and AoA in the Section 8 format
- SPICe+ filing with the licence application
- Guidance on registration of the entity under the Income-tax law after incorporation
Frequently asked questions
Can a Section 8 company earn a profit?
It can generate a surplus, but the surplus must be applied to its objects. It cannot be distributed to members as dividend.
Is a Section 8 company better than a trust or society?
It depends on the purpose. A Section 8 company is governed centrally by the MCA, has clear governance rules and is often preferred by large donors, but it has more compliance than a trust. We can walk you through the trade-offs.
Are donations to a Section 8 company tax-deductible for donors?
Only after the company obtains the relevant approval for donor deductions under the Income-tax law. This is a separate application made after incorporation.