Know the Complete Section 8 Company Registration Process in India

Are you looking to register a non-profit organization in India that works for charitable, educational, or social welfare purposes? If yes, then a Section 8 Company is the ideal choice for you. Governed by the Companies Act, 2013, a Section 8 Company is a legal structure for Non-Governmental Organizations (NGOs) that aim to promote arts, commerce, education, charity, protection of the environment, sports, research, and more.

In this blog post, we will take a deep dive into the Section 8 Company registration process, its benefits, eligibility criteria, and how Online Legal India can help you through every step of your company registration journey.

What is a Section 8 Company?

A Section 8 Company is a legal entity formed for promoting charitable objectives without the intention of distributing profits to its members. Any income or profit generated by the company is reinvested in promoting the objectives rather than being distributed as dividends.

Key Characteristics of a Section 8 Company:

Operates for charitable or not-for-profit purposes
Does not distribute profits to its members
Requires approval from the Central Government (now delegated to the ROC)
Must have at least two directors (for a private limited) or three (for a public limited)

Why Choose a Section 8 Company?

Before we jump into the process of company registration, let’s understand why Section 8 Company is often preferred over other NGO structures like Trusts and Societies.

Benefits of Registering a Section 8 Company:

Legal Recognition: Provides a legal identity to the organization.
Tax Benefits: Eligible for tax exemption under Section 12A and 80G of the Income Tax Act.
Credibility: Preferred by donors and government bodies due to stringent compliance requirements.
Limited Liability: Members' liability is limited to their share in the company.
Separate Legal Entity: It can own assets and incur liabilities in its name.

Eligibility Criteria for Section 8 Company Registration

Before initiating the company registration process, ensure that you fulfill the following conditions:

The company must intend to promote charity, education, art, sports, religion, research, or social welfare.
It must apply its profits in promoting these objectives only.
It must not distribute dividends to its members.
Minimum two directors are required for private companies and three for public companies.
At least one director must be an Indian citizen.

Documents Required for Section 8 Company Registration

To complete the process of company registration successfully, the following documents are required:

For Directors and Subscribers:

PAN Card
Aadhaar Card
Passport (in case of foreign nationals)
Voter ID/Driving License
Passport-sized photographs
Address proof (Electricity bill/Telephone bill not older than 2 months)

For Registered Office:

Rent Agreement (if rented)
No Objection Certificate (NOC) from the property owner
Utility Bill (Electricity or water bill)

Step-by-Step Process of Section 8 Company Registration

Let’s now look into the detailed process of company registration for a Section 8 Company in India.

Step 1: Obtain Digital Signature Certificate (DSC)

All proposed directors must obtain a DSC to sign electronic documents during the registration process. It can be obtained from certified authorities.

Step 2: Apply for Director Identification Number (DIN)

DIN is a unique number allotted to each director. It is issued through the SPICe+ form while filing for incorporation.

Step 3: Name Approval using RUN or SPICe+ Part A

The proposed name of the company must be unique and should reflect the purpose. You can apply for name reservation through the RUN (Reserve Unique Name) facility or SPICe+ Part A form.

Names must include words like "Foundation", "Forum", "Association", "Federation", etc.

Step 4: Drafting of Memorandum of Association (MOA) and Articles of Association (AOA)

MOA defines the main objectives of the company, while AOA defines the internal rules. For Section 8 Companies, these must explicitly state that profits will not be distributed to members.

Step 5: Filing SPICe+ Form (Part B)

This is the core part of the company registration process.

The SPICe+ form includes:

Application for DIN
PAN and TAN application
GSTIN (optional)
Professional Tax (if applicable)
ESIC and EPFO registrations

Along with the SPICe+ form, file:

MOA and AOA
Declaration by professionals (INC-8)
Declaration by subscribers and directors (INC-9)
Affidavit and consent to act as a director

Step 6: Issuance of License under Section 8

Once the documents are verified, the Registrar of Companies (ROC) will issue a license in Form INC-16 or INC-17 under Section 8 of the Companies Act, 2013.

Step 7: Certificate of Incorporation

Upon approval, the ROC will issue the Certificate of Incorporation, along with PAN and TAN details.

Post-Incorporation Compliance

After successful company registration, there are a few mandatory compliance requirements:

Opening a Bank Account in the name of the company
Applying for 12A and 80G registrations for tax exemptions
Maintaining Books of Accounts
Filing Annual Returns and financial statements
Conducting Board Meetings as per statutory requirements

Failure to comply can lead to penalties and loss of license.

How Online Legal India Can Help

Navigating the company registration process for a Section 8 Company can be complex, especially with legal documentation and compliance requirements. This is where Online Legal India comes into play.

Services Offered:

End-to-end Section 8 Company Registration
Documentation support
MOA & AOA drafting
DSC & DIN procurement
ROC Filing and License issuance
Post-registration compliance (12A, 80G, GST, etc.)

Why Choose Online Legal India?

Expert legal consultants and chartered accountants
Affordable pricing with transparent fees
Quick turnaround time
100% online process

Conclusion

A Section 8 Company is a powerful legal structure for anyone looking to make a difference through charitable, educational, or social work. With proper registration and compliance, your organization can gain credibility, enjoy tax benefits, and receive better donor support.

The process of company registration for a Section 8 Company may seem complicated, but with professional help from Online Legal India, you can complete it smoothly and efficiently.