Empower your social cause with Section 8 Company Registration

Turn your noble vision come true. Learn in detail about Section 8 Company Registration. How to register an NGO, tax benefits, document requirements, procedure and more. Talk to our experts at 9211963599

Overview

In India, starting an NGO first involves choosing the right legal structure. Section 8 companies offer national presence and government backing, and several other benefits. If you envision your NGO growing nationwide and attracting grants, registering as a Section 8 company is the way to go.

Type of NGO

• Society: Society is a non-profit organisation formed by a group of people with a shared interest in a social, cultural, educational, or religious cause. They typically operate under a constitution and are managed by a committee or governing board. Funding comes from memberships, donations, and grants. Examples include literary societies or professional associations. Society can be formed at the State level or National level. In order to form a National level Society, you must require a minimum of 7 members from different states.
• Trust: A trust is established to manage assets (money, property) for a specific purpose, often charitable. It's created with an initial donation given by the settlor and governed by a deed outlining how the trustees manage the assets to fulfil the trust's goals. Examples include scholarship trusts or environmental conservation trusts.
• Section 8 Company: A Section 8 company is the most transparent form of NGO registered under the records of ministry of corporate affairs [MCA] similar to a private limited company, but with a focus on promoting charitable activities for the public good. Such companies can't distribute profits to members and any surplus funds must be utilized to further their social goals. Donations and grants are their primary source of funding.

What is Section 8 Company?

Establishing an organisation under Section 8 of the Companies Act, 2013, [earlier known as a Section 25 Company under the Companies Act, 1956] is a noble endeavour for those dedicated to social welfare. These companies, commonly known as NGOs (Non-Governmental Organizations) or NPOs (Non-Profit Organizations), are formed with the primary objective of promoting fields like arts, science, sports, education, research, social welfare, religion, charity, or environmental protection. The key distinction of a Section 8 Company is that it operates without the motive of profit; any income generated is reinvested to further the company's objectives, and no dividends are distributed to its members.

Benefits

• Tax Exemptions: Enjoy significant tax benefits under Sections 12A and 80G of the Income Tax Act.
• No Minimum Capital: Start without any minimum paid-up capital requirement.
• Separate Legal Entity: The company has its own identity, separate from its members.
• Limited Liability: Members' liability is limited to their share contribution.
• Credibility: Gain higher trust and recognition from authorities and donors.
• Easy Transferability: Ownership can be transferred without complex procedures.

Eligibility

• Minimum 2 Shareholders (for Private Ltd. Co.) and 7 Shareholders (for Public Ltd. Co.)
• Minimum 2 Directors (for Private Ltd. Co.) and 3 Directors (for Public Ltd. Co.)
• At least 1 Director shall be a resident in India
• No minimum Paid-up Capital
• Income-tax PAN is a mandatory requirement in case of Indian nationals
• Any one of the Identity Proof (Voter ID/Aadhaar Card/Driving License/Passport)
• Any one Proof of Residence (Bank Statement/Telephone, Mobile Bill/Electricity Bill)
• Proof of Office Address (Rental Agreement or ownership document)
• NOC from the owner of premises

Mandatory Legal Requirements

Section 8 companies must adhere to specific legal mandates to maintain their status and enjoy the associated benefits:

• Use of Words: Must include "Foundation," "Association," "Society," "Council," "Club," "Charity," "Institute," etc., in the name.
• Profit Utilization: All income must be applied towards promoting the company's objectives; no dividends to members.
• License Requirement: Obtain a license from the Central Government under Section 8.
• Compliance: Follow all regulations under the Companies Act, 2013.

Document Requirement

Directors:

• PAN (Permanent Account Number) of all directors (Mandatory)
• Address Proof (Voter Id, Passport, Driving License, Aadhaar Card)

Company:

• Registered Office Address Proof – Latest Utility Bill (Telephone, Electricity, Gas, Mobile Bill)
• No Objection Certificate from the owner of the property
• Rental Agreement (If Rented)

Stepwise Procedure for Section 8 Company Registration

1. Reserve your Company Name
2. Get Digital Signature of Directors
3. Get License from Regional Director
4. Apply for Incorporation of Section 8 Company
5. Get COI, PAN & TAN

Exemptions and Reliefs

• No Minimum Capital Requirement
• Tax Deductions
• No Stamp Duty
• Exemption from CARO Requirements
• Registered Partnership Firm as a Member
• Tax Exemptions to Donors
• Higher FDI Limits

Compliances for Section 8 Company

• Appointment of Company Secretary
• Auditor Appointment
• Conducting Statutory Audit
• Filing IT Return
• Filing Annual Return
• Conducting at least 2 Board Meetings
• Conducting Annual General Meeting
• Maintenance of Minutes
• Maintenance of Statutory Registers

Packages

Frequently Asked Questions