Section 8 Company Registration
Establish your Section 8 company effortlessly to drive your social impact goals forward.
Within 10 working days
A Section 8 Company is a type of organization you can set up to run your business.
As such they need to be registered with the Ministry of Corporate Affairs (MCA) and are subject to relevant Rules and Regulations
Your Section 8 Company with Targolegal
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Step 1
An application for Registration of Partnership firm to be send to the Registrar Of Firms
Step 2
A duly signed copy of the partnership deed must be filed with the Registrar.
Step 3
Deposit the required fees and stamp duties with the concerned authorities.
Step 4
Issuance of Certificate of Incorporation by the registrar on approval of the application form.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
What is a Section 8 Company?
Section 8 companies are Not-for-Profit organisations incorporated under the Companies Act, 2013. These companies do not operate with a prime business motive, and hence are different from the other class of companies.
Section 8 Company Registration in Bangalore, India
Section 8 Company is an organization which is registered as a Non-Profit Organization (NPO). NPO/Section 8 Company has its objective of promotion of arts, commerce, charity, education, protection of environment, science, social welfare, sports, research, religion etc. and intends to apply its profits, if any, or other income in promoting its objects. It functions exactly like a limited company including all the rights and obligations that are associated with such a company.
A Section 8 Company is similar to a Trust or Society; except, a section 8 Company is registered under the Central Government’s Ministry of Corporate Affairs. Trusts and Societies are registered under State Government regulations.
Compared to a trust or a society, a Section 8 Company has various advantages like improved members’ reach, better legal standing, credibility, transparency of donations received etc. The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.
The major difference of section 8 and other limited companies are as follows:-
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Formed with the object the of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other matters.
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The profit generated from the activities can be used only to meet administrative and other expenses incurred in the performance of activities mentioned in the Memorandum of Association i.e, dividend payment is prohibited.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Importance Of Registration
Advantages of Section 8 Company
Section 8 company advantages are not limited to giving internal satisfaction of helping people. From a financial standpoint, there are advantages that make going through the section 8 company registration process a strategic move:
i) There are many tax benefits:
As a non-profit organization, a Section 8 company organization gets several tax benefits. In fact, there are some provisions in which they are exempted from paying income tax.
ii) The share capital is minimal:
Unlike a limited company, a section 8 company doesn’t have to minimum share capital. It means that even if you don’t have any capital to put into your Section 8 Company, you can set it up.
iii) It doesn’t have to add suffix:
Section 8 Company doesn’t have to add “limited company” at the end of its name. It’s not required for this type of company to use any title either.
iv) Transferring the ownership is easy:
As the structure of this non-profit organization is same as the company, it’s easy to transfer its ownership within its members.
v) It is more trusted than other organizations:
Anyone can start a non-profit organization, but it’s the section 8 company that is seen credible by the government, and the people. Therefore, it’s almost certain that your NPO, once you register it as a Section 8 Company, would receive more donations.
As you can see, the benefits of setting up a section 8 company are many. But especially, it can make your charity organization more credible.
Requirement and Compliances Under Section- 8 Company Registration in India
Minimum Requirement
A Section 8 Company is a company to be incorporated by the Ministry of Corporate Affairs. Minimum two directors and two members are required to incorporate it.
No minimum share capital is required for section 8 company registration.
Charitable object
Section 8 companies are required to be incorporated with non-profit objectives. Any profit earned through a section 8 company will not be distributed among its members.
It will either be reinvested in the business or utilized with an objective of furtherance of its main objects, i.e. charitable purpose.
Management Team
Unlike other Trusts which are managed by the Trustees as per a Trust Deed, section 8 Companies are governed by the Board of the Director as per the MoA and AoA of the Section 8 Company.
Regulated Under Companies Act, 2013
Section 8 company also needs to follow the rules and regulation that are prescribed under the Companies Act, 2013. Maintaining Book of accounts, filing of returns as and when required.
Income tax
A company has to follow the provisions of Income Tax Act.
GST Registration
Every person or company who is indulged into providing goods and services whose aggregate turnover crosses Rs.40 lakhs in a year requires GST Registration.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Registration Conditions
Section 8 Company Registration Eligibility Criteria
Eligibility criteria for a Section 8 company registration are as follows:
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An Individual or HUF or limited Company is eligible to start a Section- 8 company registration in India.
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Two or more person who will act as a shareholder or Director of the company should fulfill all the requirements and compliances of the Section 8 Company registration.
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At least one of the directors shall be a resident of India. However, a firm may be a member of the company registered under this section.
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The objective should be the promotion of sports, social welfare, the advancement of science and art, education and financial assistance to lower income groups.
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The surplus generated must be used for meeting the principal objective of the section 8 company only.
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Founders, members, and directors of the company cannot draw any remuneration in any form of cash or kind.
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No profit should be distributed among the members and director of the company directly or indirectly
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The company should have the clear vision and project plan for the next three years.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Documents Required
Documents Required For Section 8 Company Registration
You need to have the following set of documents for Section 8 Company registration:
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PAN Card of the Directors and Shareholders
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Aadhaar Card
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Latest Bank Statement
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Telephone Bill or Electricity Bill
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Voter ID or Passport or Driving license
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Passport size photograph of all the directors and shareholders
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Copy of the Rental agreement, in case the property is on rent for the registered office
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Incorporation Process
Prepare DSC and file Name Approval
The very first step for Section 8 company registration is to prepare DSC. Apply for Digital Signature Certificate (DSC) as soon as possible.
Section 8 companies should contain words like Foundation, Society, Association, Council, Club, charities, Academy, organisation, Federation, Institute, Chamber of Commerce, Development and many more.
Apply for Section 8 Company registration license from Regional Director, MCA (INC-12)
After Name approval, we will apply for Section 8 company registration license from Regional director.
The regional director will review the objectives, plans and will grant a permit for Section 8 Company registration. RD usually takes 15 days to issue a license to operate as a section 8 company.
Filing of Section 8 Incorporation Forms on MCA Portal
After getting approval from the regional director, we will proceed to file the section 8 company registration application with the requisite documents before ROC.
Once all clarifications are provided to ROC, the ROC shall issue a Certificate of Incorporation along with a Company Identification Number (CIN).
MoA and AoA file submission
Once you get the License, you need to draft the Memorandum of Association (MoA) and Article of Association (AoA) to file section 8 company registration applications.
The Object of the company will be detailed in the MoA and the rules, and the by-laws will be mentioned in the AoA.
PAN, TAN and Bank Account
You must have your PAN, TAN and bank account ready while going for Section- 8 Company registration in India.
Compare your options before going for OPC registration
Every entrepreneur/promoter should take the pain to know about the pros and cons of these legal forms before going for partnership firm registration in Bangalore
Do I need a Registration?
What type of business names can I keep?
How risky is it for me?
To what extent is each member of the business liable?
Tell me the
minimum membership limit
Is foreign ownership allowed?
How much will I get taxed
What are my annual tax filing norms?
Is Annual Audit Required?
Can I convert my business into any other legal form??
Compulsory Conversion to
Private Limited Company Applicable?
SOLE PROPRIETORSHIP
No legal requirement to do- so.
Promoter can use any name that he likes, but avoiding names already trademarked is advisable.
Promoter will stand liable for the liabilities of the business. Because the business is not considered as a separate legal person/entity
Unlimited liability.
1 Person
NA
Individual income tax slab of the proprietor is the basis of taxation.
Only Income Tax must be filed on the basis on proprietor’s income.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr.
No
Yes. If turnover exceeds 2 cr
PARTNERSHIP
Yes. Register with Registration of Firms
Firm can use any name that he likes, but avoiding names already trademarked is advisable
Partners will stand liable for the liabilities of the business
Unlimited liability
2 People
No
Profits get taxed at 30% plus cess and surcharge. Is applicable
if profit exceeds 1 Cr
Only Income Tax must be filed for the income of firm and partners.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr
es, Partnership can be converted into a Private Limited Company or LLP.
NO
PRIVATE LIMITED
COMPANY
Yes, Ministry of Corporate Affairs registers Private limited company under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
Private Limited Company is a separate legal person in the eyes of law, registered under Companies Act 2013. So, the shareholders are not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
2 People
Yes
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Private
Limited Company must file Annual Accounts and Annual Return with the Registrar of Companies. Plus,Income
Tax must be filed separately.
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is
applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP.
Even, Public Limited Company can be converted into a Private Limited Company.
NO
LIMITED LIABILITY PARTNERSHIP
Ministry of Corporate Affairs registers an LLP business
under the Limited Liability Partnership Act, 2008.
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
“LLP” is a separate legal person in the eyes of law, registered under LLP Act 2008. So, the partners are not responsible for business’ liabilities.
Liable to the extent of their contribution (in money, in kind or in services extended)
to the LLP.
2 People
Yes
Profits get taxed at 30% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Annual Statement of
Accounts &
Solvency and Annual Return with the Registrar.Plus, Income Tax must be filed separately.
Statutory audit is to be conducted if partners contribution exceeds 25 lakhs or turnover exceeds 40 lakhs. Income tax audit is applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP. Even, Public Limited Company can be converted into a Private Limited Company.
NO
ONE PERSON COMPANY (OPC)
Yes, Ministry of Corporate Affairs registers One Person Companies under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not
similar to any registered LLP’s
or companies
OPC is a separate legal person in the eyes of law. So, the share holder is not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
1 Person
NA
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr.
Every financial year OPC
must file Annual Accounts and Annual Return with the Registrar of Companies. Plus, Income Tax must be filed separately
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is applicable if turnover exceeds 2 Crs.
OPC could be converted into any legal form. But, it depends on the number of promoters, business operations, funding requirements and other factors. Limited Liability Partnership or Private Company is preferred by promoters when seeking
expansion of their OPC
NO
Do I need a Registration?
What type of business names can I keep?
How risky is it for me?
To what extent is each member of the business liable?
Tell me the
minimum membership limit
Is foreign ownership allowed?
How much will I get taxed
What are my annual tax filing norms?
Is Annual Audit Required?
Can I convert my business into any other legal form??
Compulsory Conversion to
Private Limited Company Applicable?
PRIVATE LIMITED
COMPANY
Yes, Ministry of Corporate Affairs registers Private limited company under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
Private Limited Company is a separate legal person in the eyes of law, registered under Companies Act 2013. So, the shareholders are not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
2 People
Yes
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Private
Limited Company must file Annual Accounts and Annual Return with the Registrar of Companies. Plus,Income
Tax must be filed separately.
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is
applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP.
Even, Public Limited Company can be converted into a Private Limited Company.
NO
LIMITED LIABILITY PARTNERSHIP
Ministry of Corporate Affairs registers an LLP business
under the Limited Liability Partnership Act, 2008.
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s
or companies
“LLP” is a separate legal person in the eyes of law, registered under LLP Act 2008. So, the partners are not responsible for business’ liabilities.
Liable to the extent of their contribution (in money, in kind or in services extended)
to the LLP.
2 People
Yes
Profits get taxed at 30% plus cess and surcharge. Is applicable if profit exceeds 1 Cr
Every financial year Annual Statement of
Accounts &
Solvency and Annual Return with the Registrar.Plus, Income Tax must be filed separately.
Statutory audit is to be conducted if partners contribution exceeds 25 lakhs or turnover exceeds 40 lakhs. Income tax audit is applicable if turnover exceeds 2 Crs
Yes, Private Limited Company can be converted into a Public Company or LLP. Even, Public Limited Company can be converted into a Private Limited Company.
NO
PARTNERSHIP
Yes. Register with Registration of Firms
Firm can use any name that he likes, but avoiding names already trademarked is advisable
Partners will stand liable for the liabilities of the business
Unlimited liability
2 People
No
Profits get taxed at 30% plus cess and surcharge. Is applicable
if profit exceeds 1 Cr
Only Income Tax must be filed for the income of firm and partners.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr
es, Partnership can be converted into a Private Limited Company or LLP.
NO
Do I need a Registration?
What type of business names can I keep?
How risky is it for me?
To what extent is each member of the business liable?
Tell me the
minimum membership limit
Is foreign ownership allowed?
How much will I get taxed
What are my annual tax filing norms?
Is Annual Audit Required?
Can I convert my business into any other legal form??
Compulsory Conversion to
Private Limited Company Applicable?
ONE PERSON COMPANY (OPC)
Yes, Ministry of Corporate Affairs registers One Person Companies under the
Companies Act, 2013
Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not
similar to any registered LLP’s
or companies
OPC is a separate legal person in the eyes of law. So, the share holder is not responsible for business liabilities.
Liability is limited to his/her share capital contribution.
1 Person
NA
Profits get taxed at 25% plus cess and surcharge. Is applicable if profit exceeds 1 Cr.
Every financial year OPC
must file Annual Accounts and Annual Return with the Registrar of Companies. Plus, Income Tax must be filed separately
Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is applicable if turnover exceeds 2 Crs.
OPC could be converted into any legal form. But, it depends on the number of promoters, business operations, funding requirements and other factors. Limited Liability Partnership or Private Company is preferred by promoters when seeking
expansion of their OPC
NO
SOLE PROPRIETORSHIP
No legal requirement to do- so.
Promoter can use any name that he likes, but avoiding names already trademarked is advisable.
Promoter will stand liable for the liabilities of the business. Because the business is not considered as a separate legal person/entity
Unlimited liability.
1 Person
NA
Individual income tax slab of the proprietor is the basis of taxation.
Only Income Tax must be filed on the basis on proprietor’s income.
Only income tax audit is applicable if the turnover exceeds limit of 2 Cr.
No
Yes. If turnover exceeds 2 cr
FAQ
Who is eligible to apply for the registration of a Section 8 company?
An application for a section 8 company registration can be made by any person or an association of persons, provided:
The object of the company is to further the ideals of arts, science, research, culture, education, and social welfare in general
After the incorporation, the company uses its profits in promoting its objectives
The company refrains from paying dividends or shares to its members.
Who comes under the definition or persons or association of persons mentioned in Section 8?
The Companies Act, 2013 does not define the term ‘persons’. Hence the definition can be inferred from Section 2 (41) of the General Clauses Act, 1897 which mentions that the term ‘persons’ may include individuals or associations of individuals and Companies.
What is the procedure to register a Section 8 company?
An application has to be made using Form INC-12 to the Registrar of Companies (RoC). The following documents are to be attached alongside the application:
The Memorandum of Association (MoA) and Articles of Association (AoA) filed through Form INC-13 and Form INC-31 respectively with the Form SPICe-32
A declaration duly notarised by an appropriate authority through Form INC-14
The sources of income and the possible expenditure of the company
A declaration through Form INC-15 duly notarised by the person making the application
Form INC-9 to be furnished by the directors, on appropriate stamp paper and having it duly notarised
A copy of the resolution of the board/members.
Who authorizes the license of a Section 8 company?
The Central government authorizes the Registrars of Companies of the respective jurisdictions to issue the license for a Section 8 company.
Does Section 8 allow a company with unlimited liabilities to be registered?
As per the Companies (Incorporation) Rules, 2014, only a company with limited liabilities can be registered under the Act.
Is it mandatory that only a company limited by shares can be incorporated under Section 8?
No. Section 8 accommodates both companies limited by shares or by guarantee, i.e with or without share capital.
Is it possible to register a foreign company as a Section 8 company in India?
As per the Companies Act, 2013, a foreign company is a body corporate that is established outside India and operates its business in India, either directly or through an agent, physically or via electronic mode, and conducts its course of business in India.
On the other hand, a corporate company incorporated outside India to carry not-for-profit activities, cannot fall under the ambit of a foreign company, as there is no business activity that is being carried out. Therefore, the respective company cannot be termed as a foreign company.
However, within the norms of FEMA (Foreign Exchange Management Act, 1999) regulations, the company can institute branch offices.
Whether Trusts or Co-operative Societies can become a member or subscriber of a Section 8 company?
Yes. The Companies Act, 2013 does not prohibit a Trust or Co-operative Society from becoming a member of a Section 8 company.
Can contributions or financial aid be extended from overseas or non-residents to Section 8 companies?
The contributions made to Section 8 companies from overseas or non-resident Indians must bear compliance with the norms laid out under the Foreign Contribution and Regulation Act, 2010.
The contributions can therefore be received in accordance with the Companies Act, 2013 in addition to the Foreign Contribution and Regulation Act, 2010.
What is Section 8 Company Registration in India?
Section 8 Company is often called as Non- Profit Organization Company. A non-profit organization is often known as NGO. An NGO can register under Trust Act or under Section 8 companies act, 2013 (earlier Section 25 of Companies Act 1956). The NGO registration can be done for promoting art, science, commerce, Technology, sports, education, social research, social welfare, religion, charity and protection of environment etc.
What is the purpose of the Section 8 Company Registration in India?
Following are the purpose of the Section 8 Company Registration in India
1. Education
2. Poverty
3. Disease
4. Blood bank
5. Environment protection
6. Other objects for general public utility.
Do we need to take any permission from the Central government?
Yes, we have to take the permission or approval for section 8 company registration in India from the central government. CG approval is applied before section 8 company registration.
Is section 8 company registration costlier?
Yes, section 8 company registration is costly then trust or society registration.
What are the annual compliances to be followed by Section 8 Company?
The annual compliances of section 8 company are just like the other companies.
1. At least two Board meeting during the year should be conducted.
2. Mandatory Audit
3. Annual return is to be filed every year with other e- filing forms like MGT 7, AOC 4.
4. Income tax return is to be filed every year.
5. Additional compliances to fulfill the registration like 12AA, 80G etc.
How to appoint an auditor in Section 8 Company?
In Section 8 Company, the auditor is appointed within 30 days of Section 8 company registration by the board of Director and no Central Government approval is required.
Are there any disadvantages under Section 8 Company registration?
Following are the disadvantages under section 8 company registration which are as follows:
1. Section 8 company is complex to start as it requires Central Government Approval.
2. Section 8 compliance cost is high as compared to any other trust or society
3. Penalty provisions are harsh under section 8 company.
What are the other requirements for Section 8 Company to claim tax exemption?
1. Section 12AA under Income tax act
2. Section 80G for Donators of the
3. FCRA Registration
What are the Section 8 Company Registration Fees?
The cost of Section 8 Company registration varies from company to company.
Are there any minimum numbers of member requirements for section 8 company registration?
No, there is no concept of the minimum number of member requirement for section 8 company registration.