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Overview of Section 8 Company Registration:

In legal terms, Section 8 of The Companies Act 2013, describes an NGO whose objectives are to promote arts, commerce, science, research, education, sports, charity, social welfare, religion, environmental protection, or other similar activities goals. These entities intend to use their profits to achieve their mission. They cannot distribute dividends to their shareholders and have to be mandatorily utilized for the promotion of charitable objectives. 

Such organizations obtain an incorporation certificate from the central government and are liable to adhere to the rules specified by the government. 

How long does it take?

Legally Own Your Company in Just 15 Days!!

Step 1 : Digital Signature Certificate

1 Working Days : The Digital Version of Physical Certificates, DSC acts as a virtual seal that authenticates your company’s identity electronically. The Cryptographic Technology used to create unique Digital Signatures helps keep all your critical and sensitive documents safe.

Step 2 : Director Identification Number

1 Working Days : Aspire to be the director of a Sector 8 Company someday? Then DIN is a must. This eight-digit identification number with a lifetime validity has all the details of the directors maintained in a database, safeguarding the interest of the company.

Step 3 : Name Approval

Upto 5 Working Days : Everybody wants to give their company an unique identity and a unique name is the foremost priority for the same, which has to be approved by MCA to ensure that the proposed name is not in use by any other companies.

Step 4 : Incorporation of Documents

Upto 8 Working Days : Incorporation Documents like Memorandum of Association(MOA) and Article of Association(AOA) needs to be approved and verified by the government for smooth functioning of the company. Simultaneously, we @Compregi apply for PAN and TAN of your company.

Documents Required for a Sector 8 Company Registration

1ID Proof

Scanned copies of

  • PAN Card 
  • Aadhar Card
  • Voter ID
  • Passport
  • Driving License
    of all the directors of the company are needed.

Address Proof

Bank Statement/Utility bill in the name of the Director, not older than 2 months.

Registered Office Proof

-No Objection Certificate(NOC) from the owner.
-Utility bill(not older than 2 months). 
-Notarized rent agreement,in case of rented property, or, registry proof, in case of owned property.

Photograph

Latest Passport size photograph.

What Do You Get

DSC

Virtual Seal for you to sign the documents.

DIN

Lifetime validity DIN to safeguard the interest of the company.

Memorandum of Association

Ensures the existence of the company by defining rules and objectives of the business.

Articles of Association

Ensures the existence of the company by defining rules and objectives of the business.

PAN Card

Company’s Personal Account Number to open a bank account.

TAN Number

Essential 10 digit alpha-numeric number for tax compliance mechanism under Indian Laws.

Incorporation Certificate

Bears all the details of the company setting it a legal separate entity.

Sector 8 Company Registration Cost

We at Compregi believe in complete transparency in the complete registration process of your company. Below mentioned cost structure includes all the necessary government fees required at multiple stages of registration.

LIMITED LIABILITY PARTNERSHIP

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4999/-
  • Free Consultancy
  • Free Search Check
  • Preview before Filing
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SECTOR 8 COMPANY (NGO)

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5999/-
  • Free Consultancy
  • Free Search Check
  • Preview before Filing
  • 100% Peace of Mind
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PRIVATE LIMITED

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4999/-
  • Free Consultancy
  • Free Search Check
  • Preview before Filing
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Key Points of Section 8 Companies in India:

  1. NGOs in India can be registered under the Registrar of Societies or as a Non-Profit entity under Section 8 Company of the Companies Act, 2013. 
  2. Compliance with the Companies Act is compulsory for Section 8 Company. 
  3. An NGO must be registered explicitly to advance philanthropic causes and activities.
  4. The NGO’s income and profits should be dedicated to furthering its charitable objectives.
  5. Distributing dividends to the Section 8 Company’s members is strictly prohibited.
  6. Any changes to the charter documents require consent from the government. 
  7. Section 8 Companies are identical to the former Section 25 Companies under the Companies Act 1956 and are now recognized as such under the prevailing legislation.
  8.  Section 8 companies must have at least two directors, and these directors must meet certain qualifications.
  9. The name of a Section 8 company must end with the words ‘Foundation’, ‘Association’, ‘Society’, ‘Council’, ‘Club’, ‘Charity’, ‘Institute’, ‘Organisation’, ‘Federation’, ‘Trust’, or ‘Academy’.

Benefits of Section 8 Company Registration in India:

Separate Legal Entity:

Section 8 companies are recognized as separate legal entities separate from their founders and members under the Companies Act, which means that they can enter into contracts, own property, and sue or be sued in their name. 

Tax Benefits:

Section 8 companies are eligible for 100% tax exemption, including income tax, stamp duty, and registration fees since their profits are for charitable purposes. 

More Credibility:

Section 8 companies have a high level of credibility in the eyes of donors, investors, and other stakeholders due to their adherence to strict legal compliance frameworks and their focus on social and charitable objectives. 

Limited Liability:

Section 8 companies provide limited liability protection to their members, which means that the personal assets of the members are protected in case of any financial loss or liability. In case of any default or debt incurred by the company, the members’ personal assets remain unaffected.

Who is Eligible for Section 8 Company Registration in India?

The eligibility criteria to use Section 8 Company Registration are listed as follows:

  1. An Individual or Hindu Undivided Family (HUF) can start a Section 8 company. 
  2. Two or more persons can be Directors or shareholders, and they must fulfill all the compliances and requirements for Section 8 company incorporation under the Companies Act. 
  3. There must be at least one director who should be a resident of India.
  4. The company must intend to promote science, commerce, education, art, sports, research, religion, charity, social welfare, protection of the environment, or other objectives. 
  5. The company cannot share its profits or pay any dividends or remunerations to its members, founders or directors.

Mandatory Requirements for Section 8 Company Registration:

Following are some mandatory requirements for Section 8 Company Registration:

The applicant must ensure that the chosen name for the entity does not resemble the name of any existing company, is not undesirable and does not contain words or expressions requiring prior approval from the Central Government. It should also correlate with the objectives to be undertaken by the company.

A minimum of 2 directors is required for Section 8 Company registration.

The Company should have one or more objectives for promoting sports, social welfare, science, and arts.

Section 8 Companies must be managed by the BoD (Board of Directors) as per AoA & MoA of the companies, unlike other Trusts that are handled by the Trustees as per the Trust Deed.

All the proposed company’s directors must have a DSC or Digital Signature Certificate for the Registration because the forms for the Registration process are filed online & should be digitally signed.

These entities need to file returns & maintain Books of Account with ROCs.

The Company must refrain from distributing profits to its members and directors directly or indirectly.

The Company should have a registered office within thirty days of its incorporation and maintain it at all times afterward.

What are the Documents Required for Section 8 Company Registration Process?

The eligibility criteria to use Section 8 Company Registration are listed as follows:

  • Scanned copies of any one of the following ID proofs of all the directors of the company are needed: 
  1. PAN Card 
  2. Aadhar Card 
  3. Voter ID 
  4. Passport 
  5. Driving License 
  • Bank Statement/Utility bill in the name of the Director, not older than 2 months as Address Proof.
  • Latest Passport size photograph of all the directors or members.
  • No Objection Certificate(NOC) from the owner.
  • Utility bill(not older than 2 months). 
  • Notarized rent agreement, in case of rented property, or, registry proof, in case of owned property.
  • Memorandum of Association (MoA) & Articles of Association (AoA)
  • Annual income estimates for the next three years, along with sources of income and objects of expenditures.
  • DSC (Digital Signature Certificate)
  • Declaration by the first director and subscribers
  • Declaration in Form INC 14&15 from a Chartered Accountant 

Section 8 Company Registration Procedure:

Below are the steps for the registration process of Section 8 company:

Obtain DSC and DIN.

Choose a unique name for the company and apply for name approval with the Registrar of Companies (ROC).

File Form INC-12 with the Registrar of Companies to apply for a Licence under Section 8 Company. Once approved, a Licence under Section 8 Company will be issued in Form INC-16.

Draft the Memorandum of Association (MOA) and Articles of Association (AOA) of the company in Form No. INC–13.

Once the company obtains its License under Section 8, you can file SPICe+ Form with the Registrar of Companies (ROC) for the Registration along with the vital documents.

Simultaneously, you can apply for PAN and TAN of your company.

The Incorporation Certificate is typically received within 3-4 working days of successful submission, subject to approval from the Central Registration Centre-Registrar of the Company.

Annual Compliances for Section 8 Companies in India:

Following are the annual compliances for Section 8 Companies in India:

  1. Maintain Books of Accounts
  2. Mandatory Annual Audit Report
  3. File an annual return with the Registrar of Companies (ROC) within 60 days of the Annual General Meeting (AGM)
  4. Maintain Statutory Registers
  5. Fie financial statements in Form AOC-4
  6. File ITR
  7. Fulfill additional compliances for registrations like 12AA, 80G, etc
  8. Conduct a minimum of two board meetings in a year

Penalties for Non-Compliance:

01
Per the Companies Act, if the Company fails to comply with the legal provisions, then the Central Government will cancel its license.
02
If the Company’s objectives are conducted fraudulently or in violation of the objectives for which it is established, the license can be canceled.
03
In case a Company fails to comply with the provisions of the Companies Act, then the Company will be punishable with a fine not less than Rs. 10 lakhs & may extend to Rs. 1 crore.
04
The Officers & Directors of the Company in default of the provisions will be punishable with a fine not less than Rs. 25,000 which may extend to Rs. 25 lakhs or both.

Why Choose Compregi?

With CompRegi, you can own your Section 8 Company legally in 15 days! The experts and professionals at Compregi help you with all the process, right from opening a bank account for your company to legally getting your business started. We believe in complete transparency in all the processes and keep you updated with each ongoing step. We value your time and ensure to complete the registration process within the promised deadline. So join us for seamless registration and endless possibilities for your business. 

FAQs

What is the difference between a Section 8 company and a trust?

A trust is a legal arrangement where a trustee holds and manages property for the benefit of another person or entity whereas a Section 8 company is a separate legal entity undertaking activities in its own name and has perpetual succession. Section 8 companies owned by their shareholders have limited functionalities as compared to a trust owned by trustees. 

What is the minimum capital requirement for Section 8 Company registration?

There is no minimum capital requirement for the Registration of Section 8 Company

Can a Section 8 company operate outside India?

A Section 8 company can operate outside India, subject to compliance with the relevant laws of the foreign country.

Is there a provision in The Companies Act to dissolve a Section 8 Company?

Yes, a Section 8 company does have a process to be dissolved which is prescribed in the Companies Act, 2013. The surplus generated must be donated to another Section 8 company with similar objectives or transferred to a charitable trust or society.

Can a Section 8 company accept foreign donations?

A Section 8 company is free to accept foreign donations, subject to compliance with the Foreign Contribution Regulation Act, 2010.

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