Sec. 8 Company Registration in India
Register under Section 8 of the Companies Act to form a nonprofit with legal status, tax benefits, and credibility for social work.
- Start your NGO the easy way.
- Section 8: Legal recognition for social impact.
- Turn your cause into a recognized NGO.
- Section 8 registration – build trust, drive change.
- Formalize your NGO, maximize your reach.
Section 8 Company Registration
We are all familiar with the term NGO (Non- Non-Governmental Organization). The other name for an NGO is a Non-profit organization. The name itself explains the basic objective of an NGO. Generally, organizations are run with a motive of profit-making making but NGOs are run for a non-profit motive.
Sec. 8 Company is also one of the forms in which an NGO can be registered and run in India. Traditionally, Trusts were a more popular form of NGO in India, but nowadays, Section 8 company registration is gaining pace due to its structure, flexibility, and transparency.
Basically Sec. 8 Company is a private or public limited company registered with the Ministry of Corporate Affairs. The objectives of the Sec. 8 Company must be related to the promotion of Health, culture, education, and charity purposes.
Sec. 8 company registration is a fully online process, just like the incorporation of a private limited company, so there is no need to go to various departments for registration.
| Section 8 Company | Private limited company |
|---|---|
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The objectives of the company are non-profit in nature. |
The objectives of the company are profit in nature. |
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There is no need to add private limited in Sec. 8 company. |
The name of the company must end with Private Limited. |
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Sec. 8 company cannot distribute dividends to its members.
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Pvt. Ltd. Company can distribute surplus amount to its members as a Dividend. |
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A Sec. 8 License Number is issued with a Certificate of Incorporation. |
No such License is issued in case of Pvt. Ltd. Company. |
Advantages of a Sec. 8 Company
Limited liability
Businesses often need to borrow money for working capital or managing capital expenditure. In general, business entities like partnerships, partners are personally liable for debts taken by the firm. In the case of a Sec. 8 company, members are liable for any company debts in proportion to their paid-up capital, and their assets are safe.
Easy to raise Funds
As a Sec 8 Company is registered with MCA, it is easier to get CSR funds from Corporations and Government grants. If the company has CSR-1 registration and also has NGO Darpan registration, then Govt. grants and CSR funds can be given to sec. 8 company.
Expansion of Core team
After a point, if the company feels the need for technical, financial, or management know-how from a person, a Sec. 8 company can easily add a new director or member who can provide the necessary support to the company.
Perpetual Succession
A Sec. 8 company enjoys perpetual succession. It means that a company's existence is not dependent upon shareholders, directors, employees, etc. Stakeholders may come and go, but the company will remain forever unless it is wound up or closed.
Separate legal entity
Businesses often need to borrow money for working capital or managing capital expenditure. In general, business entities like partnerships, partners are personally liable for debts taken by the firm. In the case of a Sec. 8 company, members are liable for any company debts in proportion to their paid-up capital, and their assets are safe.
Tax Benefits
A sec. 8 company registered with the Income Tax Department under Section. 12A can be exempted from Income tax on surplus income. If the company is registered U/S 80 G of the Income Tax Act, then donors can also save tax on the amount of donations made to Sec. 8 company.
Lower paid-up capital requirement
There is no such requirement of minimum paid-up capital in Sec. 8 company. It can be started with a capital of Rs. 5000 only and can be enhanced later on.
Stamp duty exemption
Sec. 8 companies are not required to pay any stamp duty at the time of incorporation, which overall reduces the formation cost of a Sec. 8 company.
Pan India presence
Sec. 8 companies can operate on Pan Pan-India level. There is no need to take separate registrations in different states for operations.
No suffix (Pvt. Ltd.) required
Sec. 8 company is not required to add Private Limited in its name. It can use Foundation, association, or organization as a suffix. It also helps to distinguish it from a normal private limited company.
Documents Required for Section 8 NGO Registration
Identity Proof of Directors
PAN Card, Aadhar card,
(voter ID card/Passport/ Driving license/Ration card)
Address Proof of Directors
Bank statement/Electricity bill /Telephone/Mobile bill
Register Office Address Proof
Electricity bill/Rent agreement
Identity Proof
Passport
Residence card
Address Proof
Bank statement/
Electricity bill
Telephone/Mobile bill
Registered office
Electricity bill/Rent agreement
Start your company with Tech Munshi
Our team of expert professionals will guide you through the entire company registration process. Tech Munshi will guide you on every step from choosing the proposed name of the company to the process of finalizing the objectives of the Sec 8 company, keeping in mind the charitable purpose of the company.
We have a vast network of professionals through which we ensure that every step in the registration process is completed very smoothly and seamlessly. When we start a new venture in any field, we require the right guidance so that what we thought comes into reality.
Experts at Tech Munshi will assist you in completing the necessary and correct documentation, which will be required during the company registration process. Our team will help in the post-incorporation process as well, within the time limit prescribed by MCA to avoid unnecessary fines.
FAQ
Can a sec. 8 company carry on social services?
Yes, the Sec. 8 company is just like any other NGO. A sec. 8 company is allowed to carry on only that work which is for the benefit of the whole society or the general public. There should be no profit motive for members behind it.
Is it mandatory to take registration under section 12A & 80G?
No, it’s not mandatory, but for receiving donations in good volume and for availing Income tax exemptions on its income, it has become necessary to take registration u/s 12A and 80G.
What are the immediate compliances to be done after the incorporation of Sec. 8 company?
Once a company is incorporated, the first thing to do is to open a current company account. After opening a current account, all the members should deposit their portion of paid-up capital in the current account within 180 days of incorporation. After depositing the same in the current account, the INC-20A form is filed as the commencement of business.
Can a sec. 8 company distribute dividends to its members?
No. A sec. 8 company can not distribute dividends to its members. However, it can give remuneration to a member if a particular member has a proper skill and contributes to the NGO to achieve its goals.
Can a director in a pvt. Ltd. The company became a director in a sec. 8 company.
Yes, it is possible for a person who is a director in a private company. Ltd. Company to become a director in a sec. 8 company. visitor that you are a good fit for them.
How much time does it take to incorporate a Section 8 company after RUN approval?
Once the Company’s name is approved, we must file Part B of the Spice+ form with all required attachments. If Forms and Documents are properly filled and submitted, MCA approves the company within 7 working days, usually. potential clients, and help convince the visitor that you are a good fit for them.