In India, forming a Section 8 Company is one of the most recognized and structured ways to start a non-profit organization. Whether your aim is to promote education, empower rural communities, or support environmental causes, incorporating a Section 8 Company Registration offers several legal, financial, and administrative benefits. This article walks you through the online process for Section 8 company incorporation, along with essential follow-up registrations like FCRA Registration, CSR-1 Registration, NITI Aayog Registration, and 12A and 80G Registration.
Introduction to Section 8 Company
What is a Section 8 Company?
A Section 8 Company is a non-profit entity registered under Section 8 of the Companies Act, 2013. It is primarily formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or protection of the environment—without the intention of earning profit.
Benefits of a Section 8 Company
•Tax exemptions through 12A and 80G registration
• Corporate donations allowed via CSR-1 registration
• High credibility for grants and partnerships
• Separate legal entity with limited liability
• Ease of compliance compared to Trusts and Societies
Eligibility Criteria for Section 8 Company
Who Can Form a Section 8 Company?
Any individual (resident or non-resident), LLP, or organization can become a director or member. Minimum two directors and two members are required.
Objectives and Nature of Activities
The core purpose must be promoting social welfare without the goal of profit distribution. All profits must be reinvested in the organization's activities.
Documents Required for Incorporation
For Directors
• PAN Card
• Aadhaar Card
• Passport (for foreign nationals)
• Address Proof (Bank statement, Utility bill)
For Registered Office
• Rental Agreement or Property Deed
• NOC from property owner
• Utility bill (not older than 2 months)
Other Key Documents
• Digital Signature Certificate (DSC)
• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Declaration in Form INC-14 and INC-15
Section 8 Company Registration Process
1. Name Reservation via RUN: Use the RUN (Reserve Unique Name) service on the MCA portal to apply for a unique company name, with a suffix like "Foundation," "Association," or "Society."
2. Apply for Digital Signature Certificate (DSC): All proposed directors must have a DSC for signing digital forms.
3. Filing SPICe+ Form: SPICe+ is an integrated form that covers:
• Company incorporation
• PAN & TAN
• GST (optional)
• ESIC/EPFO (optional)
4. INC-12 Application for License: This is the core step where you request the license to operate as a Section 8 Company. It must include:
• MOA & AOA
• Financial statements
• Board resolutions
• Estimated income & expenditure
Once approved, you'll get a license under Section 8, followed by the Certificate of Incorporation (COI).
Post-Incorporation Compliance
Once incorporated, you must apply for:
• PAN and TAN
• Open a dedicated company bank account
• Maintain proper books of accounts
• File annual returns with the Registrar of Companies (ROC)
Section 8 Company vs NGO Trust vs Society
A Section 8 Company, Trust, and Society are three popular legal structures for non-profit organizations in India, each governed by different laws and suited for specific purposes. A Section 8 Company is regulated by the Companies Act 2013 and registered with the Ministry of Corporate Affairs (MCA), offering the advantage of being a separate legal entity. It's the preferred choice for organizations seeking CSR funding and foreign grants due to its credibility and structured compliance. In comparison, a Trust is formed under the Indian Trust Act and registered through the Sub-Registrar. Unlike a company, it does not possess a separate legal identity, making it more suitable for family-run or private charitable efforts. A Society, governed by the Societies Registration Act, is registered with the Registrar of Societies and operates as a separate legal entity, often chosen for membership-driven NGOs like cultural or welfare groups. All three structures are eligible for tax exemptions, including 12A and 80G registration.
Importance of Additional Registrations
While incorporating a Section 8 company is the foundation, additional registrations like FCRA, CSR-1, NITI Aayog, and 12A/80G amplify your credibility and access to funding.
12A and 80G Registration
Process & Benefits
• File Form 10A for 12A registration (tax exemption for NGO income)
• File Form 10G for 80G registration (donors get tax benefits)
Timeline: 1-2 months
Authority: Income Tax Department
FCRA Registration for Foreign Donations
Eligibility & Process
• Must be a registered NGO (at least 3 years old)
• Apply online through FCRA portal
• Submit activity report and audited accounts
Authority: Ministry of Home Affairs
Validity: 5 years
CSR-1 Registration for Corporate Donations
If your NGO wants to receive Corporate Social Responsibility (CSR) funds, you must file Form CSR-1 with MCA.
Documents Needed:
• PAN of NGO
• Registration certificate
• Resolution authorizing CSR registration
NITI Aayog Registration for Grants & Schemes
NITI Aayog registration helps NGOs get listed on the NGO Darpan portal and access government schemes.
Benefits:
• Required for many grant applications
• Enhance trust and transparency
Documents Required:
• Company PAN
• MOA & AOA
• 12A and 80G Certificates
Common Mistakes in Section 8 Company Registration
• Not preparing the INC-12 license application correctly
• Skipping 12A & 80G registration
• Missing mandatory ROC filings
• Delays in opening a bank account
Cost and Timeline for Section 8 Registration
The cost and timeline for Section 8 company registration in India are relatively affordable and efficient, especially considering the legal benefits involved. The process begins with name approval, which typically costs ₹1,000 and takes around 1–2 days. Obtaining a Digital Signature Certificate (DSC) for two directors is essential and usually costs ₹2,000, completed within a day. The SPICe+ form filing, which includes incorporation, PAN, and TAN, is free of government fees and takes approximately 3–5 days. The critical INC-12 license application involves a fee of ₹2,000 and is processed in 7–10 days. If you opt for professional assistance, expect additional consultancy fees ranging from ₹8,000 to ₹15,000. Overall, the total cost ranges between ₹12,000 to ₹20,000, and the complete process takes about 15 to 20 working days.
Online Platforms for Easy Registration
• MCA Portal: www.mca.gov.in
• FCRA Portal: fcraonline.nic.in
• NITI Aayog NGO Darpan: ngodarpan.gov.in
Alternatively, you can hire CA/CS professionals for hassle-free filing.
Maintaining Compliance After Registration
• ROC Filing: AOC-4 and MGT-7 annually
• Maintain Books of Account
• Income Tax Filing
• Renew FCRA & CSR-1 regularly
Conclusion
Incorporating a Section 8 Company online is a streamlined, efficient way to establish a credible non-profit organization in India. From name reservation and digital filing to obtaining essential approvals, the process ensures legal recognition and operational clarity. However, incorporation is just the beginning—registrations like 12A, 80G, FCRA Registration, CSR-1, and NITI Aayog significantly enhance your NGO's funding potential and compliance standing. By following the correct steps and staying updated with legal mandates, you can build a strong foundation for social impact. Whether you do it yourself or seek expert help, ensuring proper registration and ongoing compliance is key to the long-term success of your Section 8 company.
Frequently Asked Questions (FAQs)
Q1. Can a Section 8 Company receive foreign funding from the beginning?
Ans. No, a newly incorporated Section 8 Company must be at least three years old before applying for FCRA registration, which is mandatory to legally receive foreign donations.
Q2. Is GST registration mandatory for Section 8 companies?
Ans. No, GST registration is not mandatory unless your Section 8 Company crosses the prescribed turnover threshold or engages in taxable services.
Q3. Can a Section 8 Company be converted into a private or public limited company?
Ans. No, a Section 8 Company cannot be converted into any other type of company unless it surrenders its Section 8 status and follows the approval process prescribed by the Central Government.
Q4. Is audit mandatory for Section 8 Companies?
Ans. Yes, even if the income is below the taxable limit, all Section 8 Companies are required to get their accounts audited annually by a Chartered Accountant.
Q5. Are directors of a Section 8 Company liable for its debts?
Ans. No, directors enjoy limited liability, meaning their personal assets are not at risk. However, they must act within the scope of their duties and in compliance with the law.
