What is a Section 8 Company: Characteristics & Registration Process

When it comes to starting a nonprofit in India, a Section 8 Company is one of the most popular choices. Known for its credibility and structured framework, it has become the go-to vehicle for NGOs, social enterprises, and organizations working toward charitable or philanthropic objectives.

For NGOs, it grants legal recognition and ensures smooth compliance; for social enterprises, it provides a strong foundation to attract investors and donors; and for contributors, it guarantees transparency in fund utilization. In short, a Section 8 Company registration bridges trust between those who give and those who serve.

Section 8(1) of the Companies Act, 2013 allows you to incorporate a company to promote commerce, art, science, sports, education, research, social welfare, religion, charity, or environmental protection. However, it must apply its profits solely toward these objectives and prohibit any distribution of dividends to its members.

In this blog, we will cover everything you need to know about Section 8 Companies, what they are, their benefits, eligibility, registration process, compliance requirements, and how they differ from other nonprofit structures like trusts and societies.

Section 8 of the Companies Act, 2013: What Does it Mean?

Section 8 of the Companies Act, 2013, talks about how a non-profit company can be formed in India. It lays down certain rules, such as:

• The company must be created to promote charitable or social causes.
  
• Any income or profit earned should be used only to achieve its goals and not given to members as dividends.
  
• To function under this section, the company must get a license from the central government.

This setup makes sure that the company stays true to its charitable purpose while following the law.

What are the Key Compliances in a Section 8 Company in India?

Section 8 Companies must follow these essential compliance requirements to operate legally and avoid penalties:

1. DIN & DSC for Directors: Every director must obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC) for filing MCA e-forms.
   
2. License from Central Government: Obtain a Section 8 license from the Registrar of Companies (RoC) via SPICe+ before registration.
   
3. Incorporation with RoC: Register by submitting the Memorandum of Association (MOA), Articles of Association (AOA), and prescribed forms.
   
4. Operate as per Stated Objective: Activities must strictly align with charitable or non-profit objectives in the MOA.
   
5. Board Meetings: Hold at least four meetings annually, with no more than 120 days between meetings.
   
6. Annual General Meeting (AGM): Conduct Annual General Meeting yearly, usually within six months of the financial year-end.
   
7. Financial Statements: Prepare audited Balance Sheet, Income & Expenditure Account, and Cash Flow Statement, and file with RoC.
   
8. Filing Forms AOC-4 & MGT-7/MGT-7A: Submit audited accounts and annual returns within prescribed timelines.
   
9. Director’s Report: Prepare and file an annual report summarizing performance, activities, and compliance.
   
10. Statutory Registers: Maintain updated registers of members, directors, and debenture holders.
    
11. Audit Requirements: Appoint a statutory auditor and report their appointment/reappointment to RoC.
    
12. Tax Compliance: File Income Tax Returns (ITR), apply for Section 12A exemption, and claim Section 80G benefits for donors.
    
13. CSR Applicability (if applicable): Comply with Section 135 CSR norms if financial thresholds are met.
    
14. FCRA Registration: Register under FCRA to receive foreign donations and maintain proper records.
    
15. Annual Returns: File annual returns within 60 days of AGM with complete management and operational details.
    
16. Other Applicable Laws: Comply with labor laws, environmental norms, fundraising regulations, and state-specific NGO rules.

Following these compliances on time ensures smooth operations and avoids penalties or late fees.

What Compliance Exemptions does a Section 8 Company in India Receive?

Section 8 companies enjoy several relaxations to reduce legal and financial burdens, allowing them to focus on social and charitable work:

• Company Secretary: Can appoint anyone, even if not an ICSI member, if paid-up capital is below ₹10 crore.
  
• No Minimum Paid-up Capital: Can operate with any amount of share capital.
  
• Flexible AGM Scheduling: Board and shareholders can decide AGM timing; first AGM within 9 months, subsequent within 6 months.
  
• Shorter Notice for Meetings: General meetings require only 14 days’ notice.
  
• Relaxed Minutes Recording: Can record minutes within 30 days if Articles allow.
  
• Financial Statements: Can send copies to members at least 14 days before the meeting.
  
• Director Rules: No fixed minimum/maximum directors, no independent directors required, no need to file consent letters, and no limit on directorships.
  
• Board Meetings: Only one meeting required every six months; quorum is 8 members or 25% of total strength (minimum 2).
  
• Committee Exemptions: Can form Audit and Nomination/Remuneration Committees without independent directors.
  
• Contract Compliance: Sections 184(2) & 189 apply only for contracts over ₹1,00,000.

These exemptions ensure that donations and grants are primarily used for the company’s objectives rather than compliance formalities. 

Who Governs Section 8 Company Registration in India?

If you want to register a non-profit, it’s important to know the laws and authorities that control its formation and operation. These rules give your company legal recognition and allow it to enjoy different benefits.

Section 8 Company registration in India is mainly governed by the following:

• The Companies Act, 2013: Section 8 of the Companies Act provides the rules for creating and managing non-profit companies in India.
  
• Ministry of Corporate Affairs (MCA): This is the central government authority that looks after the Companies Act. All registration steps are done online through the MCA portal for Section 8 company registration.
  
• Registrar of Companies (RoC): The RoC of each state is responsible for approving the incorporation. It issues the license and the Certificate of Incorporation.
  
• Income Tax Department: After incorporation, a Section 8 Company must also register with the Income Tax Department to get tax benefits like 80G for donors and 12AB for its own income.

What are the Eligibility Criteria for Section 8 Company Registration in India?

Before starting the registration process, a Section 8 company must meet some basic rules about its structure and required documents. These ensure that the company is legally valid and properly set up.

1. Core Requirements

• Minimum Two Directors: To form a Section 8 company, you must appoint at least two directors. If you register it as a public company, you must appoint a minimum of three directors. Out of these, at least one director must live in India.
  
• Minimum Two Members: The company must have at least two members/subscribers to start. The same people can act as both members and directors.
  
• Unique Company Name: The name of the company must be original and not similar to any other registered company or trademark. It should also reflect the non-profit or social purpose of the company.
  
• Clear Non-Profit Objectives: The Memorandum of Association (MOA) and Articles of Association (AOA) must clearly mention that the company’s goals are charitable or social in nature.
  
• Registered Office in India: A valid address in India must be provided as the official registered office of the company. Entrepreneurs can use either a physical office or a virtual office address for registration.

2. Mandatory Prerequisites

• KYC Documents: All members and directors must submit their PAN Card and Aadhaar Card as proof of identity and address.
  
• Digital Signature Certificate (DSC): Every director must obtain a DSC, which they use to sign forms and documents online during the MCA registration process.
  
• Director Identification Number (DIN): Each director must obtain a DIN, a unique 8-digit number issued by the Central Government for anyone serving as a director in an Indian company.

What Documents Must You Submit for Section 8 Company Registration in India?

To register a Section 8 company through the MCA portal (mca.gov.in), you need to prepare and submit certain documents. These are required from the directors, members, and the registered office of the company. Below is a simple checklist:

From Directors/Members

• PAN Card (mandatory for all Indian nationals).
  
• Identity Proof such as Aadhaar Card, Voter ID, Passport, or Driving License.
  
• Address Proof like a recent bank statement or utility bill.
  
• Passport-size photographs of all members and directors.

For the Registered Office

• Address Proof of the office location (latest electricity bill, water bill, or telephone bill).
  
• No Objection Certificate (NOC) from the property owner.
  
• Rent Agreement if the registered office is on rented premises.

Other Essential Documents

• Digital Signature Certificate (DSC): At least one director must have a valid DSC for signing forms online.
  
• Draft Memorandum of Association (MOA): Prepared in Form INC-13, stating the objectives of the company.
  
• Draft Articles of Association (AOA): Outlining the internal rules and regulations of the company.

What Forms are Required for Section 8 Company Registration in India?

The registration of a Section 8 company in India is done fully online through the Ministry of Corporate Affairs (MCA) portal. The process mainly requires filling out one key form along with a few supporting forms.

Here’s a list of the important forms used in the process:

Form Name / Number	Purpose	Key Details
SPICe+ (Part A)	Name Reservation	Used to apply for and reserve a unique company name that matches the non-profit objective. Must follow Rule 8 of the Companies (Incorporation) Rules, 2014.
SPICe+ (Part B)	Company Incorporation	The main form for incorporation. It also covers applications for Director Identification Number (DIN), PAN, and TAN.
e-MoA (INC-33)	Memorandum of Association	Defines the charitable purpose of the company. Prepared in electronic format as per Form INC-13.
e-AoA (INC-34)	Articles of Association	Sets the internal rules, governance, and regulations of the company.
AGILE-PRO-S (INC-35)	Linked Registrations	A compulsory form for GSTIN, EPFO, ESIC, Professional Tax, and opening a company bank account.
INC-9	Declaration	An auto-generated declaration by subscribers and directors confirming compliance with the Companies Act. Submitted with SPICe+.

What is the Section 8 Company Registration Procedure in India?

Registering a Section 8 Company in India is a structured process, carried out through the Ministry of Corporate Affairs (MCA). Since this company serves charitable or non-profit purposes, the procedure requires you to obtain certain approvals and submit specific forms. Here’s a step-by-step look at how it works:

Step 1 – Get a Digital Signature Certificate (DSC)

• The first step is for all proposed directors of the company to obtain a DSC. 
• This acts like an online signature and is required for filing MCA forms. 
• To get a DSC, directors must submit proof of identity (like Aadhaar, PAN) and proof of address.

Once all directors have their DSCs, you can move on to obtaining a Director Identification Number (DIN), which is essential for legally recognizing each director.

Step 2 – Apply for Director Identification Number (DIN)

• Once DSCs are ready, you need to apply for a DIN using Form DIR-3 on the MCA portal.
• This is a unique number given to each director. 
• After approval, the Registrar of Companies (ROC) allots the DIN.

With DINs in hand, you are now eligible to apply for a Section 8 Company license, which is a crucial step before incorporation.

Step 3 – Apply for Section 8 License

Next, Form INC-12 has to be filed with the ROC. This is an application for obtaining a Section 8 Company license. 

You must attach documents such as,

• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Declarations
• Financial details of the promoters

Once the ROC reviews your application, it will determine whether your company meets the eligibility criteria for a non-profit license.

Step 4 – Grant of License

• If the ROC is satisfied with your documents, a license will be issued in Form INC-16. 
• This license confirms that your company can be registered under Section 8 of the Companies Act, 2013, as a non-profit entity.

With the license secured, you can proceed to the final step of filing incorporation forms to legally register the company.

Step 5 – File Incorporation Forms

• After receiving the license, you must file the SPICe+ form with all linked documents and attachments (like PAN, TAN, bank details, and compliance forms). 
• If all details are correct, the ROC issues a Certificate of Incorporation along with a unique Company Identification Number (CIN).

After this step, your Section 8 Company is officially registered and can begin operations as a recognized non-profit entity.

The total Section 8 Company registration cost in India generally ranges between ₹12,000 and ₹35,000, depending on the number of directors, state of registration, and professional service charges. This amount includes government filing fees, DSC/DIN issuance, professional drafting, and post-incorporation compliance.

To view a complete cost breakdown, including government charges, professional fees, and optional services, you can check our detailed guide here: Section 8 Company Registration Fees – Full Breakdown

At RegisterKaro, we help you with the complete process of forming a new business, right from documentation to final incorporation. Get in touch with us today, and we’ll be glad to support you at every step of your entrepreneurial journey.

What is the Post-Incorporation Compliance Checklist for a Section 8 Company in India?

Maintaining compliance is very important for a Section 8 Company to retain its non-profit status and avoid penalties. Here’s a simplified checklist of key post-incorporation requirements:

Compliance Area	Requirement	Due Date / Form
First Board Meeting	Disclose director interests (MBP-1) and non-disqualification (DIR-8)	Within 30 days of incorporation
First Auditor	Within 30 days, Form INC-22	Appoint a statutory auditor
Registered Office	Establish registered office	Within 180 days, Form INC-20A
Commencement of Business	File declaration to start operations	Open an account & deposit subscription money
Bank Account	Within 6 months of FY-end, Notice & Minutes	Within 60 days
Statutory Registers & Books	Maintain registers & accounting books	Ongoing
Board Meetings	Hold at least 2 meetings/year	Gap ≤ 120 days; Minutes required
Annual General Meeting (AGM)	Approve financial statements & auditor reports	Within 30 days of AGM, Form AOC-4
Financial Statements	File audited accounts	Within 60 days of AGM, Form MGT-7
Annual Return	File details of directors & shareholders	Within 60 days of AGM; Form MGT-7
Income Tax & KYC	File ITR; DIR-3 KYC for directors	Sept 30 annually; Applicable ITR Form & DIR-3 KYC
12AB & 80G Compliance	Donation reporting	As per IT Act; Forms 10A/10AB, 10BD
Event-Based	Director changes (DIR-12), MOA/AOA changes (MGT-14), GST Registration, FCRA (FC-4), SBO reporting (BEN-2)	Within 30 days / as applicable

Note: This is a general checklist. Actual compliance may vary based on the company’s activities, turnover, and other factors. Consulting a professional is recommended for accurate and timely compliance.

What is the Timeline, Validity & Renewal Process for Section 8 Company Registration in India?

The registration process is completely online and usually takes 10 to 15 working days after submitting all the correct documents. This includes:

• Name reservation: 1–2 days
  
• Document preparation: 2–4 days
  
• Application processing by MCA: 5–7 days

Validity: Once registered, a Section 8 Company is valid for perpetuity, meaning it can operate indefinitely as long as it follows all legal compliance requirements.

Renewal: There is no need for renewal. The Certificate of Incorporation is permanent, allowing the company to run continuously without re-registration.

Penalty for Non-Compliance under the Companies Act

Failure to comply with the Companies Act rules can result in heavy fines or even company dissolution. Key penalties include:

1. Financial Penalties for Late Filing

• ₹100 per day per form for late annual filings (AOC-4 for financial statements, MGT-7 for annual returns).
  
• Maximum limits: AOC-4 – ₹10 Lakh (company) + ₹1 Lakh (officers), MGT-7 – ₹5 Lakh (company) + ₹50,000 (officers).
  
• Persistent non-filing may lead to director disqualification and the company being marked “Defaulting.”

2. Revocation of Section 8 Company License (Section 8(6))

• The government can revoke the license if the company acts against its objectives, fraudulently, or against public interest.
  
• The company is given a fair chance to be heard.
  
• Actions may include winding up, amalgamation with another Section 8 company, or changing the company’s name to “Limited” or “Private Limited.”

3. General Penalties for Section 8 Contraventions (Section 8(11))

• Company default: Fine of ₹10 Lakh – ₹1 Crore.
  
• Defaulting directors/officers: Imprisonment up to 3 years, or fine of ₹25,000 – ₹25 Lakh, or both.
  
• Fraudulent conduct attracts additional penalties under Section 447.

4. Penalty for Fraud (Section 447)

• If the fraud involves ₹10 lakh or more, or 1% or more of the company’s turnover, the offender faces imprisonment for 6 months to 10 years and a fine equal to 1–3 times the fraud amount. The court must impose a minimum of 3 years’ imprisonment if the fraud affects public interest.
  
• Minor fraud (< ₹10 Lakh or <1% of turnover, not involving public interest): Imprisonment up to 5 years, fine up to ₹50 Lakh, or both.

How Does a Section 8 Company Compare with Trusts and Societies in India?

Choosing the right legal structure is important for any nonprofit initiative. Here’s a simple comparison of the three main types of NPOs in India:

Feature	Trust	Society	Section 8 Company
Governing Law	Indian Trusts Act, 1882 (for private trusts) or State Trust Acts	Societies Registration Act, 1860 (or state-specific acts)	Companies Act, 2013
Registration Authority	Sub-Registrar of the area	Registrar of Societies (state)	Registrar of Companies (ROC), Ministry of Corporate Affairs
Minimum Members	Minimum 2 Trustees	Minimum 7 Members	Minimum 2 Members/Directors (Private Ltd.)
Governing Document	Trust Deed	Memorandum of Association & Rules	Memorandum of Association (MoA) & Articles of Association (AoA)
Credibility & Recognition	Moderate	Moderate to High (varies by state)	Very High (National and International)
Annual Compliance	Minimal (ITR filing)	Moderate (annual reports to Registrar)	High (ROC filings, board meetings, statutory registers)
Ease of Formation	Relatively Easy	Moderately Easy	Complex, professional help recommended
Best Suited For	Small-scale charitable work, managing property for a cause	Membership-based organizations, schools, and welfare groups	NPOs aiming for large-scale operations, CSR funding, and national reach

Conclusion

Understanding a Section 8 Company is crucial for anyone looking to start a nonprofit in India. Choosing this structure ensures legal recognition, transparency, and credibility while helping your organization pursue charitable or social objectives smoothly.

While the registration and compliance process may seem complex, expert guidance can make it seamless. RegisterKaro offers complete support in advisory, documentation, and registration, helping you establish your nonprofit easily and focus on creating real social impact.

Contact RegisterKaro today to get professional support for forming and running your Section 8 Company successfully.

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Frequently Asked Questions (FAQs)

1. What is a Section 8 Company?

A Section 8 Company operates as a nonprofit organization registered under Section 8 of the Companies Act, 2013. It promotes charitable and social objectives such as education, art, science, sports, environmental protection, and social welfare. The company reinvests all its income and profits solely to advance its stated objectives, without distributing them to its members.

2. What are the primary objectives a Section 8 Company must follow?

A Section 8 Company must operate exclusively for charitable, social, or non-profit purposes. It cannot distribute profits or dividends to its members. All income and earnings must be reinvested to achieve its stated objectives. This framework ensures that the company remains compliant under Section 8 of the Companies Act.

3. How is a Section 8 Company different from a trust or society?

Section 8 Companies are registered under the Companies Act, unlike trusts or societies, which follow state-specific acts. They offer higher credibility and transparency for donors and investors. The compliance framework is stricter, but it provides legal recognition at national and international levels. This makes them suitable for large-scale operations and CSR-funded projects.

4. Can a Section 8 Company operate with minimal capital?

Yes, there is no minimum paid-up capital requirement for Section 8 Companies. This allows small nonprofits and social enterprises to start their operations without heavy financial barriers. Funds can be raised through donations, grants, or CSR contributions. The primary focus remains on charitable or social activities rather than capital accumulation.

5. What is the process for obtaining a Section 8 license?

To obtain a Section 8 license, Form INC-12 must be filed with the Registrar of Companies (RoC). Key documents include the Memorandum of Association (MOA), Articles of Association (AOA), and financial declarations of promoters. Upon verification, the RoC issues the license in Form INC-16. After this, the company can proceed with SPICe+ filing for incorporation.

6. How frequently must a Section 8 Company hold board meetings?

A Section 8 Company is required to hold at least one board meeting every six months. This is more flexible than other companies, which typically hold quarterly meetings. During these meetings, directors discuss financials, audits, and compliance matters. Properly documented minutes ensure transparency and good governance practices.

7. What are the tax benefits available for Section 8 Companies?

Section 8 Companies can register under Section 12AB to claim income tax exemptions. Donors can avail deductions under Section 80G for contributions made to the organization. Income generated from charitable activities is generally exempt from tax. Maintaining compliance with reporting and audit requirements is essential to retain these benefits.

8. Can foreigners become directors or members in a Section 8 Company?

Yes, foreigners can become directors or members if they meet the DIN and DSC requirements. At least one director must be an Indian resident for legal compliance. Foreign members can participate in decision-making and governance. This allows global collaboration for social initiatives and international donor involvement.

9. What happens if a Section 8 Company violates compliance rules?

Non-compliance can result in penalties, fines, or revocation of the Section 8 license. Directors may face disqualification or imprisonment in cases of severe violations. The company can also be marked as “Defaulting” by the RoC. Adhering to legal requirements ensures smooth operations and protects donor and stakeholder trust.

10. Is a Section 8 Company eligible for CSR funding?

Yes, Section 8 Companies are eligible to receive CSR contributions from companies under the Companies Act. The recognized legal structure assures transparency and proper fund usage. Projects must align with the charitable or social objectives specified in the MOA. This makes Section 8 Companies attractive for corporates looking to fund social causes.

11. Can a Section 8 Company change its objectives or MOA?

A Section 8 Company can change its objectives or amend the MOA, but only with RoC approval. Any changes must continue to align with charitable or social purposes. Alterations must be filed in Form MGT-14 and updated in official records. Unauthorized deviations can result in penalties or even license revocation, ensuring the organization remains true to its mission.