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Section 8 Company

NGO & Section 8 Company Registration in Delhi

Ashish M. Shaji
05 Feb, 2021 05 Feb, 2021
NGO & Section 8 Company Registration in Delhi

An NGO is a not-for-profit organization or the voluntary citizen’s group working for social causes & various interests. NGOs perform a variety of services, humanitarian efforts for the different sections of the society & take grievances from citizens to the government. This article describes the Section 8 Company Registration procedure.

NGOs can be registered under any of the following laws in India-

  • Trust under Indian Trusts Act;
  • Section 8 Company under Companies Act;
  • Society under Societies Registration Act.

Things to know before NGO Company Registration

The following things must be kept in mind:

  • Obtain DIN- Applicants are required to get DIN by filing Form DIR-3.
  • Obtain DSC- proposed directors should provide Digital Signature Certificate because the forms have to be signed digitally. It may be noted that the certifying agencies under GOI provide DSC.

Procedure for NGO Company Registration

Step-1

Obtain DSC of the proposed directors of the NGO and then file Form DIR-3 to get a DIN.

Step-2

ROC allots DIN to the proposed directors.

Step-3

Apply for a company name

Step-4

After the name is verified and approved, apply for the license

Step-5

NGO registration process is finished.

Documents Required for Section 8 Company Registration

  • Digital Signature Certificate (if you already have it)
  • Director Identification Number (if you already have it)
  • Memorandum of Association
  • Articles of Association
  • ID proof for members: (Aadhar Card, Passport, Voter ID)
  • Passport size Photographs
  • Director’s details (if Members are other Companies/LLPs)
  • Address Proof
READ  Conversion of Section 8 Company into Any Other Kind of Company

Steps for Registering a Section 8 Company

  1. Application of DSC & DPIN;
  2. Name approval;
  3. Approval from other authorities;
  4. Obtaining Section 8 Company License;
  5. MOA & AOA submission;
  6. Get Company incorporation certificate;
  7. Apply for PAN, TAN and Bank account.

Eligibility

  • Object must be Charitable or to promote arts, science, commerce etc.
  • Intends to apply all its profit in promoting the objectives.
  • Assures prohibiting of the payment of dividends to any of its members.

Advantages of Section 8 Company

The following advantages are enjoyed-

Advantages of Section 8 Company
  • No Minimum Share Capital Requirement;
  • Easy Transfer of Ownership;
  • Tax Benefits;
  • No need to use “NGO” or “Limited” title;
  • No Stamp Duty;
  • Clear Objectives for easy donations and loans;
  • Easy to Manage;
  • Exemptions and Privileges under Companies Act, 2013[1];
  • Relaxation in Compliances.

Concerns Related to Section 8 Company

  • Profit or income of an NGO cannot be used for any object other than those mentioned in its MOA.
  • Distribution of profits or declaration of a dividend to its members is prohibited.
  • No member can be appointed as an officer of the company with any remuneration.
  • Its income is taxed at the similar rates as another company.
  • An NGO cannot alter the provisions of its MOA and AOA except with the previous approval of the Central Government.

Conclusion

In India, NGOs may be registered as Section 8 firm, trust or a society. It is much easier to manage, register and run an NGO that’s why people prefer it the most.

Read our article: Difference between Trust, Society and Section 8 Company

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