Get Your Section 8 Company Registration (NGO) with the help of the Expert Team of My Legal Business LLP.
Section 8 company is a term used in India to refer to a type of not-for-profit company. It is registered under Section 8 of the Companies Act 2013 and is governed by the Ministry of Corporate Affairs. These companies are established with the aim of promoting commerce, the arts, science, religion, charity, or any other useful object, and they must apply their profits, if any, to the promotion of their objects. Section 8 companies enjoy several tax benefits and are subject to fewer regulations than other types of companies.
A minimum of two directors is required for the incorporation of a Section 8 company.
A minimum of two members are required at the time of incorporation, and there is no upper limit on the number of members.
There is no requirement for minimum paid-up capital.
The registered office address proof (a copy of the latest utility bill)
NOC for using the premises as a registered office
The company must have a unique name that should not be similar to an existing company or trademark.
Tax exemptions:
Section 8 companies are eligible for tax exemptions under Section 80G and 12A of the Income Tax Act. This means that donations made to the company are eligible for tax deductions for the donors. It can result in significant tax savings.
Reputation and credibility:
Having a Section 8 company can enhance the reputation and credibility of the organization, as it is recognised as a non-profit entity by the Indian government. The non-profit status implies that the company is serving a social cause and is not driven by the motive of making profits. This can help in building trust with stakeholders such as donors, volunteers, employees, and customers, who are more likely to support a company with a social mission.
Easier fundraising:
Easier fundraising is one of the key benefits of having a Section 8 company in India. Non-profit organisations are often seen as more trustworthy and credible, which can make it easier to raise funds from a variety of sources.
People are often more willing to donate to organisations that serve a social cause than to businesses that are primarily driven by profits. Additionally, donations made to a Section 8 company are eligible for tax deductions for the donors, which can further incentivize people to support the organization.
Better governance:
Section 8 companies are required to adhere to strict governance rules and regulations, which help to ensure transparency, accountability, and ethical business practices.
Reputable status:
Section 8 companies are considered to be organizations of repute and credibility, which can enhance their reputation and credibility in the eyes of stakeholders, such as donors, customers, and partners.
Easy incorporation:
Section 8 companies have a relatively simple and straightforward process for incorporation, which can be completed online in a matter of a few days.
Eligibility for grants and funding:
Section 8 companies can raise funds through donations, grants, and other means that can be used to carry out their objects and activities.
Perpetual existence:
Section 8 companies have a perpetual existence, which means that they can continue to exist even if members or directors change, and their objects and activities can continue even after their incorporation.
To register a section 8 company, a certain set of documents and details are required. We will draft the documents required for submission with the registrar of companies for the registration of your Section 8 company. The documents required from your end are:
Passport-size photographs
Copy of PAN Card
Copy of AADHAAR CARD or VOTER CARD or DRIVING LICENCE or PASSPORT
Copy of Latest BANK STATEMENT or any UTILITY BILL
Copy of latest utility bill and NOC from the owner of the premises to use the premises as the registered office of the company
The first and foremost step for the registration of a Section 8 company is to obtain digital signatures from the vendors authorised by the MCA. Passport-size photographs, a copy of the PAN card and the Aadhaar card, a mail ID, and a mobile phone number are required to obtain a digital signature certificate (DSC).
The second step for the registration of a section 8 company is choosing a unique name for the company and getting it reserved. The name of the company must be unique, and it must not resemble the name of any other Section 8 company. The name of the Section 8 company must include the words foundation, forum, association, federation, chambers, confederation, council, electoral trust, and the like, etc. Form Spice+ Part A can be used for filling out name reservations.
Once the name is approved by the MCA, we will draft the documents required for registration. These documents include the draft MOA, AOA, project income and expenditure, and other declarations. After the drafting of the documents, we will get them signed by the directors of the proposed company.
The fourth step in the registration of a section 8 company is filling of Form Spice+ Part B. In this form, we need to attach the MOA, AOA, Proof of registered office address, NOC, KYC of directors and members, projected income and expenditure and INC-15.
After filling of Form Spice+ Part B, the form will be verified by the registrar of companies, and if the registrar is satisfied with the documents filed, he will issue a Section 8 licence and certificate of incorporation.
| Particulars | Trust | Society | Section 8 company |
|---|---|---|---|
| Governing legislation | In India, trusts are governed by the Indian Trust Act, 1882. |
The Societies Registration Act, 1860, governs society registration in India. | Registration and compliance of Section 8 companies are governed by the Companies Act of 2013. |
| Document of constitution | A trust deed is the main document for registering a trust. | For the registration of a society, the most important instrument is its laws. | MOA (Memorandum of Association) and AOA (Articles of Association) |
| Registry Authority | Registrar of Trust. | Registrar of Societies | Registrar of Companies (ROC) |
| Minimum Member Required | At least two trustees are required. | Minimum 7 members are required. | Minimum 2 directors/shareholders are required. |
| Annual Compliance | There is no requirement for annual return filing. | Societies are required to file their statements of affairs annually with the registrar of societies. | There is a mandatory requirement of annual compliance by filing annual accounts and returning the company to the MCA. |
| Preference in registration under the FCRA | Low preference is given. | Low preference is given. | Preferred for FCRA. |
| Transparency | Low | Low | High |
| Online Filling Facility status | Not available. So its registration is more time-consuming and complicated. | Not available. The registration and compliance process is very time-consuming and complicated. | Available. Registration and compliances can be filed online, and it is a very easy and smooth process. |
| Grants and subsidies from the government | Not much | Not Much | Preferred |
| 80G and 12A Registration | Possible | Possible | Possible |
| Registration period (approximately) | 15-20 Days | 15-20 Days | 5-7 Days |
After the registration of a section 8 company, the following compliances need to be done:
Form INC-20A (within 180 days):
Every company having share capital must commence its business within 180 days from the date of its incorporation. This means that within 180 days of being registered as a legal entity, a company must start actively conducting its business operations and file Form INC-20A with the ROC.
Filling out Form MGT-7:
This form is used to file annual returns by companies with the Ministry of Corporate Affairs (MCA). Every company is required to file the E-form MGT 7 within 60 days from the date of the annual general meeting. This form contains information about the company's share capital, details of members, and other relevant financial information.
Filling of FORM AOC-4:
This form is used to file the financial statements of a company with the Ministry of Corporate Affairs (MCA). The form must be filed annually within 30 days of the annual general meeting (AGM) and contains a balance sheet, a profit and loss account, a cash flow statement, and other relevant financial information. The form is a declaration by the company that the financial statements submitted are in compliance with the accounting standards prescribed by the Institute of Chartered Accountants of India (ICAI) and give a true and fair view of the financial position of the company. Filing an accurate and timely AOC-4 form is mandatory for all companies incorporated in India.
DIN KYC:
Every director who has a DIN on March 31 and whose DIN is in approved status will have to submit his KYC details to the MCA. In case a director who is supposed to file the e-Form DIR-3 KYC does not file it by September 30 on the MCA 21 portal, the Ministry of Corporate Affairs will mark the DIN of such a director as ‘Deactivated due to Non-filing of DIR-3 KYC'. After that, if at any stage that director wishes to reactivate his DIN in the future by filing the eForm DIR-3 KYC, he can do so after paying a late fee of Rs 5,000.
Income Tax Return:
It is mandatory for every company to file an ITR every year. A late filing of an ITR may result in penalties and interest charges. Filing an accurate and timely ITR is mandatory for all taxpayers in India.
A Section 8 company is a type of company incorporated under the Companies Act, 2013 in India, for the promotion of arts, commerce, education, research, science, sports, or any other object of general public utility.
A minimum of two persons are required for the registration of a Section 8 company.
The key benefits of registering a Section 8 company in India include eligibility for tax exemptions, recognition as a non-profit organization, and the ability to raise funds from the public.
Registrars of Companies, CRC is authorised to issue licences to Section 8 companies.
According to the provisions of the Companies (Incorporation) Rules, 2014, the name of a Section 8 company shall include the words foundation, "forum, "association, "federation, "chambers, "confederation," "council," etc.
Yes, a Section 8 company can raise funds from the public through donations, grants, and other means, subject to compliance with relevant laws and regulations.
No, a one-person company (OPC) cannot be incorporated as or converted into a Section 8 company.
Yes, a Section 8 company can be converted into any other company by following the required rules and regulations of the Companies Act of 2013.
Yes, a society registered under the Societies Act can be registered or converted into a Section 8 company.
Yes, the objects of Section 8 companies can be altered with the approval of shareholders and the Registrar of Companies.
Yes, a Section 8 company can hold a meeting of its members with a minimum of 14 days' notice.
Mylegalbusiness.com is India’s most trusted online business registration consultant. We have a dedicated team for registration and compliance with Section 8 companies. We can help you with registration and with the compliance requirements for section 8 companies.