Section 8 Company Registration
Section 8 Company registration is a formal procedure in India under the Companies Act, 2013,
establishing a non-profit organization. These entities are formed with the primary purpose of
promoting activities related to commerce, art, science, education, research, social welfare,
religion, charity, or any other endeavour beneficial to society. Unlike profit-driven entities, the
objective of a Section 8 Company is not financial gain but the advancement of charitable or social
causes.
Section 8 Companies enjoy exemptions from the mandatory minimum capital requirement and can be
registered with a nominal amount of capital. They are permitted to raise funds through donations,
subscriptions, grants, or contributions from members or the public. Any profits generated by a
Section 8 Company must be reinvested towards furthering its objectives, and no dividends are
distributed to its members.
Adhering to these regulations ensures Section 8 Companies maintain their status as vehicles for
social welfare and charitable endeavors, contributing positively to societal development within the
framework of Indian corporate law.
Documents Required for Section 8 company Registration
Adherence to these document requirements ensures compliance with legal standards and facilitates
the smooth processing of registration for the respective entity.
Section 8 Company Registration Process
The process of incorporating a Section 8 Company involves several structured steps under the
provisions of the Companies Act, 2013:
Obtaining DSC & DIN
The initial step is to apply for the Digital Signature Certificate (DSC) and Director Identification
Number (DIN) for the directors. DSC is essential for electronically signing incorporation documents,
obtained from authorized Certifying Agencies. DIN is a unique lifetime identifier necessary for
appointment as a director in any company, with an application processing time typically spanning 5-7
days.
Company Name Availability
Subsequently, the proposed company name is applied for through Form RUN, allowing submission of up
to two preferred names. Name approval is a critical aspect of the registration process, ensuring
compliance with regulatory guidelines.
Drafting of MOA & AOA
Upon approval of the company name, the Memorandum of Association (MOA) and Articles of Association
(AOA) are electronically drafted using Form INC-13. These documents outline the company's
objectives, operational framework, and internal governance structure.
License under Section 8
A representative from MyDear Providers submits Form INC-12, accompanied by the requisite fee, to the
Registrar for obtaining a license under Section 8 of the Companies Act. This step formalizes the
company's status as a Section 8 entity, emphasizing its non-profit objectives.
Certificate of Incorporation
Following submission of the incorporation forms and fees to the Registrar of Companies (ROC), the
ROC issues the Certificate of Incorporation under Section 8. This certificate grants the company
legal recognition and confers upon it the privileges and exemptions associated with Section 8
status. Approval from the Ministry of Corporate Affairs (MCA) typically occurs within 5-7 days,
subject to their processing timelines.
Adhering to these procedural steps ensures the proper establishment of a Section 8 Company in
compliance with statutory requirements, enabling it to pursue its charitable or social objectives
effectively under the legal framework provided by Indian corporate law.
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Section 8 Company Registration FAQ's
What is a Section 8 Company?
A Section 8 Company is a non-profit organization registered under the Companies Act, 2013, with the objective of promoting commerce, art, science, sports, education, charity, research, social welfare, or environmental protection. It cannot distribute profits to its members.
Who can form a Section 8 Company?
A Section 8 Company can be formed by individuals or entities who wish to carry out charitable or non-profit activities. It requires a minimum of two directors and two members (can be the same persons).
What are the benefits of registering a Section 8 Company?
Non-profit status: The company is set up for public good and cannot distribute profits to members.
Limited liability: Shareholders and directors have limited liability.
Tax exemptions: Section 8 companies can benefit from tax exemptions under the Income Tax Act.
Credibility: Registered under the Companies Act, it has more credibility than unregistered trusts or societies.
Limited liability: Shareholders and directors have limited liability.
Tax exemptions: Section 8 companies can benefit from tax exemptions under the Income Tax Act.
Credibility: Registered under the Companies Act, it has more credibility than unregistered trusts or societies.
Can a Section 8 Company make a profit?
A Section 8 Company can generate income or profits, but the profits must be used only for the furtherance of its non-profit objectives. The profits cannot be distributed to members or directors.
What are the tax benefits of a Section 8 Company?
Tax exemptions under sections 11 and 12 of the Income Tax Act, provided the company follows the prescribed conditions.
Charitable deductions: Donors to Section 8 Companies may be eligible for tax deductions under Section 80G of the Income Tax Act.
Charitable deductions: Donors to Section 8 Companies may be eligible for tax deductions under Section 80G of the Income Tax Act.
What is the difference between a Section 8 Company and a Trust or Society?
Section 8 Company: Registered under the Companies Act with a focus on non-profit activities; more formal structure with limited liability.
Trust/Society: Registered under specific state or national laws; typically less formal with fewer compliance requirements than a Section 8 Company.
Trust/Society: Registered under specific state or national laws; typically less formal with fewer compliance requirements than a Section 8 Company.
What is the liability of members and directors in a Section 8 Company?
Members and directors of a Section 8 Company have limited liability, meaning they are not personally liable for the company’s debts beyond their unpaid share capital.
How many members are required for a Section 8 Company?
A Section 8 Company requires at least two members (shareholders) to form the company.
Can a Section 8 Company convert into a Private Limited or Public Limited Company?
Yes, a Section 8 Company can be converted into a Private Limited or Public Limited Company, provided it meets the prescribed conditions and receives approval from the Registrar of Companies (RoC).
Can a Section 8 Company raise funds?
Yes, a Section 8 Company can raise funds through donations, grants, or fundraisers, but it must use the funds exclusively for its charitable activities. It can also apply for government schemes or CSR (Corporate Social Responsibility) funds.
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