What is a Section 8 Company in India? A Complete Guide for Non-Profit Founders
Everything you need to know about Section 8 company registration, Central Government license, features, and advantages over traditional trusts.
Executive Summary
A Section 8 Company is registered under the Companies Act, 2013 for promoting commerce, art, science, education, charity, or social welfare without intent to distribute profits to its members. It represents the most respected corporate vehicle for social impact in India.
Who It Applies To
- Philanthropists establishing long-term charitable or educational institutions
- Social impact startups combining innovation with non-profit missions
- Foundations planning to seek corporate CSR grants and international funding
- Teams wanting pan-India operational jurisdiction without state-level society hurdles
Documents Checklist
- PAN and Aadhaar / Passport of at least 2 Directors & Shareholders
- Recent Bank Statement / Utility Bill (less than 2 months old) for identity
- Proof of Registered Office Address (Electricity bill / Property tax receipt)
- No Objection Certificate (NOC) from the property owner and Rent Agreement
- Draft Memorandum of Association (MoA) highlighting social objects
- 3-Year projected receipts and expenditure budget certified by a professional
Statutory Process
Step 1: Step 1: Obtain Digital Signature Certificates (Class 3 DSC) for all proposed directors.
Step 2: Step 2: Reserve the proposed name via RUN (Reserve Unique Name) or SPICe+ Part A with suffixes like Foundation, Association, Council, or Forum.
Step 3: Step 3: Apply for Central Government Section 8 License via Form INC-12 on MCA portal.
Step 4: Step 4: File SPICe+ Part B (INC-32) along with AGILE-PRO-S (EPFO, ESIC, Professional Tax, Bank Account).
Step 5: Step 5: Ministry of Corporate Affairs verifies documents and issues Certificate of Incorporation (COI) with License Number.
Step 6: Step 6: Open Bank Account and file INC-20A (Commencement of Business within 180 days).
Frequently Asked Questions
Can a Section 8 Company pay salaries to its directors?
Yes, reasonable remuneration can be paid to directors for actual professional services rendered, provided it is authorized by the board and permitted under its Articles of Association.
Can a Section 8 Company accept donations immediately after incorporation?
Yes, it can receive domestic contributions immediately. However, to provide tax deduction benefits to donors (80G) and exempt its own income from tax (12AB), separate registrations with the Income Tax Department are required.
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