If youre looking to start a non-profit organization in India whether for charitable, educational, religious, or social welfare purposes a Section 8 company is one of the most structured and credible options available. Governed by the Companies Act, 2013, a Section 8 company operates similarly to other companies but without the motive of profit.
This guide breaks down the entire process of registering a Section 8 company in India, step by step, for beginners.
What is a Section 8 Company?
A Section 8 company is a legal entity established under Section 8 of the Companies Act, 2013. Its primary objective must be to promote arts, commerce, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any similar objective.
Key Characteristics
Non-profit nature: Profits must be reinvested to achieve the companys objectives. Dividends to members are not allowed.
Legal identity: It enjoys a separate legal existence, just like any private limited or public limited company.
Limited liability: Members have limited liability.
Tax benefits: May be eligible for exemptions under the Income Tax Act, subject to compliance.
Why Choose a Section 8 Company?
Compared to a trust or society, a Section 8 company enjoys greater transparency, better legal standing, and improved credibility among donors and regulatory bodies.
Benefits
Legal recognition across India
Structured management and governance
Easier access to funding and grants
Option to receive foreign donations (with FCRA approval)
Step-by-Step Guide to Register a Section 8 Company
Lets walk through the process of registering a Section 8 company in India.
Step 1: Obtain Digital Signature Certificates (DSC)
The first step is for all proposed directors and members to obtain a Digital Signature Certificate (DSC).
Why It's Needed
DSCs are required for signing electronic documents filed with the Ministry of Corporate Affairs (MCA).
How to Get It
Apply through authorized agencies like eMudhra, Sify, or NSDL
Submit identity proof and address proof
It typically takes 12 working days
Step 2: Apply for Director Identification Number (DIN)
Once the DSC is ready, you need to apply for the Director Identification Number (DIN) for all proposed directors.
Process
File Form DIR-3 online via the MCA portal
Attach self-attested ID proof, address proof, and photograph
DIN approval usually takes 12 working days
Note: If you are incorporating through SPICe+ (as discussed below), you can apply for DIN during the registration itself.
Step 3: Choose a Company Name
Next, choose a unique name for your Section 8 company and apply for name approval.
Rules for Naming
Must end with Foundation, Association, Federation, Confederation, Council, or Forum
Should reflect the purpose of the organization
Cannot resemble the name of an existing company or violate the Emblems Act
Application Process
Use the Part A of the SPICe+ form on the MCA portal
Provide up to two proposed names with justifications
Approval is typically granted within 23 business days
Step 4: Draft MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) define the structure and rules of your company.
Key Details to Include
MOA: Objects of the company, registered office, liability of members
AOA: Rules for internal governance like meetings, voting, and powers of directors
Tip: For Section 8 companies, a specific format is required for the MOA under Form INC-13.
Step 5: File SPICe+ Form for Incorporation
The SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form is a comprehensive online form for company registration.
What It Covers
Company incorporation
DIN allotment
PAN and TAN application
ESIC and EPFO registration
GST (optional)
Documents Required
MOA (Form INC-13)
AOA (Form INC-31)
Declaration by directors (Form INC-15)
Declaration of professional (Form INC-14)
Identity/address proof of directors and subscribers
Proof of registered office (utility bill, NOC from owner)
Submission
Upload documents on the MCA portal
Pay the required government fees (note: Section 8 companies enjoy reduced or waived fees)
Step 6: Get License under Section 8
This is a crucial step. Along with the SPICe+ form, you must file Form INC-12 to obtain the Section 8 license from the Regional Director (RD).
Documents Required
Draft MOA and AOA
Declaration by directors and professional (CA/CS/CMA)
Estimated annual income and expenditure for the next three years
List of promoters and proposed board members
Timeline
License approval may take up to 1520 working days
Step 7: Certificate of Incorporation
Once all forms are approved and the Section 8 license is granted, the ROC (Registrar of Companies) will issue a Certificate of Incorporation (COI).
This certificate officially establishes your Section 8 company as a legal entity.
Post-Incorporation Compliance
After registration, you must comply with several statutory requirements to maintain the legal status of your Section 8 company.
Key Compliances
PAN and TAN: These are issued automatically upon registration
Open bank account: In the companys name using the COI and PAN
Filing annual returns: With the MCA using Form AOC-4 and MGT-7
Maintain proper books of accounts
Apply for 12A and 80G registration: To avail tax exemptions for both the company and donors
Common Mistakes to Avoid
Choosing a name thats too similar to existing entities
Not drafting MOA and AOA properly
Failing to include all required declarations
Ignoring post-incorporation compliance
Working with a qualified professional (CA/CS) can help you avoid these pitfalls.
Conclusion
Registering a Section 8 company in India is a well-defined but detail-oriented process. While the registration requires careful documentation and regulatory approvals, the benefits in terms of credibility, tax advantages, and operational structure make it worthwhile for any serious non-profit initiative.
By following this step-by-step guide and ensuring compliance with legal norms, you can establish a solid foundation for your organizations long-term impact.
Frequently Asked Questions
1. Can a Section 8 company earn a profit?
A Section 8 company can earn income, but profits cannot be distributed to its members or directors. All earnings must be reinvested to promote the company's charitable objectives.
2. How many people are required to start a Section 8 company?
You need a minimum of two directors and two shareholders to register a Section 8 company as a private limited entity. If it's a public limited Section 8 company, three directors and seven members are required.
3. What is the validity period of the Section 8 license?
The Section 8 license is valid for the lifetime of the company, unless it is revoked by the government for non-compliance or misuse of funds.
4. Can foreign nationals be directors or members of a Section 8 company?
Yes, foreign nationals or NRIs can be directors or members, provided at least one director is a resident Indian. Additional compliance like FCRA approval is required if the company plans to receive foreign donations.
5. Is it mandatory to register under 12A and 80G?
It's not mandatory, but highly recommended. 12A registration exempts the company from income tax, and 80G registration allows donors to claim tax deductions. These significantly improve the organizations funding potential.
