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Section 8 Company Registration

₹ 19,999/-
+ GST 
  • DSC & DIN
  • Company Name Reservation
  • MoA & AoA
  • Central Govt. License
  • NGO Identification No 
  • All India Validity 
  • ROC Fees as per NCT of Delhi. 
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What is Section 8 Company

A non-profit organization is often known as NGO. An NGO can register under Trust Act. Or under Section 8 companies act, 2013 (earlier Section 25 of Companies Act 1956). The NGO can be registered for promoting art, science, commerce, Technology, sports, education, social research, social welfare, religion, charity and protection of environment etc.

A Section 8 Company has similar features to a Trust or Society expect, a section 8 Company is registered with the Ministry of Corporate Affairs. NGO/Trusts and Societies are registered under the State laws. Section- 8 Company is recommended for the big operation sizes like for opening of the university, College, School, research center, Sports Academy and technical college etc.

Anyone can register a Non-Profit Organization in the form of a Company registered under Section 8 of Companies Act, 2013. Such companies are incorporated under Section 8 with main objects of promotion of science, art, education, health, sports, environment, research or any other charitable and welfare objective. In India Non-Profit Organizations can also be registered as a trust or a Society. However a NGO registered as a section 8 Company has some added advantages. If the scale of operations of your planned organization is on the larger side then it is recommended to register a section 8 Company.

Basics Features of a Section 8 Companies

Section 8 companies are required to be incorporated with nonprofit objectives. Any profit earned through running a section 8 company will not be distributed among its members. It will either be reinvested in the business or utilized with an objective of furtherance of its main objects i.e. charitable purpose.

In order to start a Section 8 company, the following criteria should be met:-

  • A Section 8 Company is a company to be incorporated by the Ministry of Corporate Affairs. Minimum two directors and two members are required to incorporate it.
  • No minimum share capital is required for registration of a section 8 company.

Procedure For Section 8 Company Registration

1. Obtaining DSC & DIN

For registering a Company or NGO with central Government Digital Signature Certificate (DSC) and Director Identification Number (DIN) is required for all directors. DIN & DSC usually take 3-5 working days.

2. Name Approval

After DIN & DSC, we will file an application for reservation of a name for section 8 company before the ministry of corporate affairs. Usually, it takes 3-5 working days.

3. License from Regional Director, MCA (INC-12)

After Name approval, we will apply for Section 8 license from Regional director, the regional director will review the objectives, plans and will grant a license for Section 8 Company. RD usually takes 15 days to issue a license to operate as a section 8 company.

4. Filing of Incorporation Forms on MCA Portal

After approval from the regional director, we will proceed to filing of final incorporation documents before ROC. Once all clarifications are provided to ROC, the ROC shall issue a Certificate of Incorporation along with a Company Identification Number (CIN).

Documents required For Section 8 Company Registration

From All Directors and Members
  • PAN Card
  • Latest Bank Statement/Telephone or Mobile Bill
  • Voter's ID/Passport/Driver's License
  • Passport-sized photograph of all directors and shareholder
  • Scan copy of Signature (signature should same as on PAN Card)
For Proposed Registered office (Residential or commercial)
  • Any Utility bills
  • Scan copy of Rent agreement with NOC from owner

Benefits of Section 8 Company

Registration of a NGO as Section 8 Company will entail following benefits:

  • Legal Entity

It is the best way to make sure that your organization is legally recognized. Once the Section 8 Company is registered its information is in the records of the Ministry of Corporate Affairs, and the institution attains a legal entity separate from its owners/ establishers.

  • Records are legally admissible

All the registered companies are required to complete the yearly compliances; Section 8 Company is no exception to this requirement. It means that all the financial and others records are filed with the authorities and verified by them as well. This makes all these documents legally admissible in event of any disputes and litigation.

  • Higher Credibility among  Donors

Because of the legal recognition and periodical compliance requirements which are required to be complied with on a rigorous basis, the organization secures a high level of credibility among the potential donors. All the activities undertaken by the Section 8 company as well the utilization of finances can be tracked as its functioning is very transparent in nature. Thus, it ranks higher on the list of potential investors and donors as opposed to registered Trust or Societies.

  • Support of Government Department

Government authorities introduce many subsidies and grants for nonprofit organizations. Registered Section 8 companies have a high probability of receiving such grants due to the credibility of their records and transparency.

Advantages of Forming a Section 8 Company

  • Registration procedure is quite easy.
  • There is an exemption from Stamp duty payment for registration.
  • A registered partnership firm is allowed to become the member of Section 8 Company.
  • No minimum capital is required for registration
  • Once the organization acquires 80G and 12A under Income Tax Act, the donors and contributors receive exemption under the same for the amount of their contribution.
FAQ on Section 8 Company
1. What are the basic features of a Section 8 Company?

Companies incorporated under Section 8 of Companies Act 2013 are not established with the objects of profit earning. Their main object is promotion of art, education, science, art, sports or furtherance of any other kind of social welfare activities. As the main object is not to earn profits no dividends are declared. And any revenue generated is either reinvested in the company or utilized for furtherance of the main objects.

2. Why Section 8 Company is is a better option than Trust and Society when planning to establish a NGO?

Setting up an NGO is the most preferable way to establish a NGO, especially if you aiming for a more organized and large level of operation. It has following benefits:
o Provides better legal standing
o Regular return filing ensures better credibility among the donors
o More relaxations and subsidies available due to corporate structure.

3. What is the time line for Section 8 Company Registration?

Starting from name approval to final Section 8 Company Registration, the entire process can be completed within 15 to 20 days of time. Earlier it took around 10 to 12 days just for grant of license for the proposed company. However, earlier this year there were many changes introduced by the authorities who have resulted in speeding up the entire registration of company and facilitate ease of doing business.

4. Is there any difference in Registration procedure for Section 8 Company?

In order to conduct business with nonprofit objects the applicant is required to obtain license from the central government under Section 8 of Companies Act, 2013. This requires for filing for an additional application in Form INC-12 after name reservation is done through RUN services. Only after this license is granted that an applicant is allowed to submit SPICe for final registration of the company. Unlike other private limited company AOA and MOA are not filed in E form they are first approved in INC-12 and ten scanned copies of the same approved documents are attached in SPICe Form.

5. What are the applicable government charges for Section 8 Company Registration?

While incorporating a Section 8 companies there are many charges for DSC, document preparation form filing etc. Following are the government charges involved in the procedure:
o Fees for Name Approval service (RUN): Rs.1000
o Fees for Application for License (INC-12): Rs. 2000
o Fees for final registration (SPICe): This fee has been exempted by the government.
Tough the fee for SPICe is exempted; the applicant is required to pay stamp duty. The amount of which will be state specific.

6. What are the relaxations granted under Compliances to Section 8 Company?

Following are the relaxations granted to a Section 8 company:
o The requirement to appoint an in-house company secretary is not mandatory for Section 8 Company.
o Like any other company registered under companies Act, 2013 the requirement of minimum share capital is done away with.
o Section 8 Company is not required to form a Nomination Committee.
o Decision relating to investments, borrowings or loans and advances can be made by way of circulation.

7. What are the basic requirements to register a Section 8 Company?

At least 2 Promoters/Shareholders
At least 2 Directors, out of which one must be an Indian resident
Minimum Capital Requirement is done away with.

8. Who is eligible to become a member in a section 8 company?

Following people are allowed to become a member in a Section 8 Company:
o Individual
o Any registered organization
o Nonresident Indian
o Foreigner

9. Are section 8 companies eligible for 12A and 80 G certification?

As Section 8 Company is a kind of Non-Profit Organization in India they are eligible for 12A and 80 G Certification. As 12Acertification is for tax exception on surplus funds available with the NGO and 80G certification entitles donors of the NGO for tax exception.

10. How can we change the name of Section 8 Company?

Step One: File GNL-1 for making an application to the respective ROC for such name change.
Step Two: File for name reservation through RUN service available on the portal
Step Three: Special resolution is required to be filed for changes in AOA and MOA. And within 30 days of passing the resolution MGT-14 is required to be filed
Step Two: Last step is to file Form INC-24 for making an application to central government for such change in name.

11. Can a Section 8 Company be converted into a normal Private Limited Company?

Yes, as per the provisions of section 8(4)(ii) of The Companies Act, 2013 and Rule 23 of The Companies Rules, 2014 a registered Section 8 company can be converted into any other kind of company. Company is required to pass a special resolution for the same and publish a notice for the same in local newspaper. Application for the same is required to be filed with the Regional Director in Form-18 along with all the required documents. Once the approval is granted, intimation of such approval is required to be filed in Form-20.

12. Is a foreigner allowed to register section 8 company without the FRCRA registration?

Yes, a foreign national is allowed to become a member in a Section 8 company at the time of registration. As Section 8 company is registered as per the provisions of Companies Act, 2013 it is allowed to register the company with 100% FDI. However, at least one director of such proposed company is required to be an Indian resident i.e. such person must be in India for a minimum of 182 days in the immediately preceding year.

13. What are the documents required to be attached with SPICe Form for Section 8 Company Registration?

Following is a list of documents required to be prepared for registration purpose and scanned copies of the same are required to be attached with the SPICe Form:
o Memorandum & Articles of Association of the proposed company;
o A declaration confirming the application by a Company Secretary in Practice on the Non – Judicial stamp paper of prescribed value;
o List of names, descriptions, addresses & occupation of the promoters as well as Board Members of the proposed company;
o A statement showing details of assets and liabilities of the company as on date with the application;
o An estimate of future annual income and expenditure of the proposed company, specifying the source of income and object of expenditure;
o A statement giving brief description of work, if any, already done by the association;
o A statement specifying briefly the grounds on which the application is made;
o A declaration in prescribed form on non – judicial stamp paper by each person making an application;
o A letter of authority;
 

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All Features
Section-8
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Governing Laws
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Applicable State Acts
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Fundraising for charity
High
Low
Medium
Credibility in Public
High
Low
Medium
Operations
Pan India
State level
Pan India
Members Required
03
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07
Income Tax
Not Applicable
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Growth
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