A Non-Profit Organization in India, registered under Companies Act 2013, as Section 8 Company with a non-profit motive. Objective of Section 8 Companies are promotion of arts, commerce, and charity, and education, protection of environment, science, social welfare, sports, research, and religion and intends to apply its profits, if any, or other income in promoting its objects. It functions exactly like a limited company including all the rights and obligations that come with such a company.

However, it differs from a company in one very crucial aspect, i.e. it cannot use the words “Section 8” or “Limited” in its name. Section 8 Company is most popular form of NGO in India. It is easy to register, run or manage.

The income of the Section 8 Company must be used to promote only charitable objects and cannot pay any dividend to the members of the company.

The process and requirements of a Section 8 Company are exactly the same as laid down for a limited company, including all the rights and obligations that come with such a limited company. The only aspect where they differ is that a Section 8 Company cannot use the words “Section 8” or “Limited” in it’s name.

The process of registering a Section 8 Company is the same as of incorporating an NGO, Trust or Co-operative Society under the Companies Act 2013.An additional requirement is there of seeking a license from the central government under Section 8 of the Companies Act, 2013.The license, essentially, permits them to delete Private/Public Limited from their name. With this license, the company becomes eligible for certain exemptions from the provisions of law and avail the benefit of concessions in the fee.

If the proposed Section 8 Company has been registered as a private limited then a minimum of 2 directors are required. But if it is a “public limited Section 8 Company” then a minimum of 3 directors must be there.

A Section 8 Company would be controlled by the Board of Directors – as same as private limited company. During the incorporation process, the digital signature certificate is required for the proposed Directors. To obtain digital signature and DIN, the proposed Directors must submit a copy of their:-

1. PAN Card or Aadhaar Card
2. Driver’s License/Passport/Election ID/Other Government Issued ID

After documents are submitted, the applicant must complete an OTP and e-KYC procedure through a smartphone

Legally registering and approving the name of the company is mandatory. This helps in avoiding any kind of copyrights issues and also making sure that no previous section 8 company has been registered under the same name. For getting an approval, an application Form INC-1 should be filed to the Registrar of the company(Central Registration Centre – CRC of Ministry of Corporate Affairs). To avoid chances of repetition of names, the applicant will have to provide six different names for name approval. Once approved, the validity of the name extends to up to 60 days. As per the Company (Incorporation) Rules, 2014, the suggested names must contain the words such as foundation, association, forum, council, chambers, etc. to be considered a valid section 8 company name.

Once the name approved and digital signatures are secured, Our Team will prepare the MOA, AOA and incorporation application for the Section 8 Company. All the Directors must sign the document and upload a copy our Mail. Once the documents are received, the incorporation application is filed with the MCA.

On approval of the incorporation application, the Government would issue the incorporation certificate, RD license, PAN and TAN for the Section 8 Company. The entity can now use the details above open a bank current account through with banks

The Income Tax Department issues an 80 G certificate to a non-governmental organization (NGO), such as a charitable trust, or a Section 8 Company. The 80 G Certificate is given to allow donors to contribute money to non-profit organizations. In fact, by making contributions to such an entity, the donor earns a tax deduction of 50 percent because they are entitled to deduct this amount from their Gross Total Income. Additionally, the donor has to add the signed receipt of the donation made to take advantage of the exemption. Such a receipt will include the organization’s name, donation date, and PAN.12A Registration for Section 8 Companies.

12A registration is a one-time registration obtained by most Trusts, right after incorporation to be exempted from paying income tax. Section 8 Company must have 12A registration enjoy exemption from paying income tax on the surplus income of the Trust or NGO. Income tax exemption is available for all non-profit NGOs. Hence, it is important for all Trusts, NGOs and other Not-for-Profit organizations to be aware of Section 12A obtain as soon as after incorporation of the Trust and NGO.

Normally an association (Trust, Society or a Section 8 Company) must be in existence for at least three years while making the FCRA application and should not have received any foreign contribution prior to that without the Government’s approval.

For the purpose of granting registration, the association should have undertaken reasonable activity in its chosen field for the benefit of the society and should have spent at least Rs.10,00,000/- over the last three years on its aims and objects, excluding administrative expenditure. Statements of Income & Expenditure, duly audited by Chartered Accountant, for last three years are to be submitted to meets the financial parameter.

As a company help people building organizations and institutions. It is the privilege of working as a partner beside to many noble organizations focused on helping disabled children, children with AIDS etc. If you wish to start a Section 8 Company in India to contact us today.