In India, a Section 8 Company is a legal structure that is specifically designed for non-profit organizations. This form of organization is suitable for entities focused on promoting arts, science, sports, education, charity, research, social welfare, religion, or environmental conservation.

Registered under the Companies Act, 2013, a Section 8 Company enjoys various benefits, including tax exemptions and relaxed compliance requirements, making it one of the preferred structures for non-profit initiatives in India. This guide explains the process, requirements, and key considerations for the application for incorporation of a Section 8 Company, including details about the necessary forms, such as Form INC-12.

What is a Section 8 Company?

A Section 8 Company is a type of organization registered under Section 8 of the Companies Act, 2013, enabling it to function as a non-profit entity.

These companies do not aim to earn profits; rather, they are dedicated to charitable, social, educational, or similar purposes. Profits, if any, are reinvested into the organization’s objectives and not distributed to shareholders or members.

Why Choose Section 8 Company Registration?

1. Corporate Structure: Section 8 Companies have a formal corporate structure with directors and members, allowing them to gain greater credibility.
2. Tax Benefits: These companies may qualify for various tax exemptions, such as under Section 12A and Section 80G, providing financial relief.
3. Ease of Funding: Companies with Section 8 company registration in Chennai often attract donors and funding from NGOs, as the corporate structure assures donors of transparency.
4. No Minimum Capital Requirement: Section 8 Company does not have a minimum capital requirement.

Eligibility

To incorporate a Section 8 Company, below are the eligibility criteria:

1.      Objective: The Company must be formed for promoting activities like social welfare, education, religion, or other charitable causes.

2.      Profit Motive: The primary objective should not be profit-making. Profits should be reinvested to further the non-profit goals of the company.

3.      Founders and Members: A Section 8 Company requires a minimum of two directors for a Pvt ltd and 3 for a public ltd company. They must be Indian residents with a valid Director Identification Number (DIN).

Key Documents for Section 8 Company Registration

1. Digital Signatures of proposed directors
2. Director Identification Numbers (DIN) for all directors
3. Name Approval Certificate from the MCA
4. MoA and AoA
5. Declarations in Forms INC-14 and INC-15
6. Section 8 License from the RoC
7. Incorporation application (SPICe+ form)
8. PAN and TAN applications (included in SPICe+)

Steps to Incorporate a Section 8 Company

Section 8 Company incorporation involves steps below:

1. Obtain DSC: The proposed directors must acquire a Digital Signature Certificate (DSC) to sign forms electronically.
2. Apply for DIN: If directors don't have a DIN, it can be obtained during incorporation using Form SPICe+ (INC-32).
3. Name Approval: Reserve a unique name that reflects the non-profit nature of the company using the RUN service on the MCA portal.
4. Draft MoA and AoA: Prepare the Memorandum of Association (MoA) outlining the company’s objectives and the Articles of Association (AoA) for internal governance, with a clear charitable focus.
5. File Form INC-12 for License: Submit Form INC-12 to the Registrar of Companies (RoC), along with the MoA, AoA, Form INC-14, Form INC-15, and projected financials for three years.
6. File SPICe+ Form (INC-32): After receiving the Section 8 license, file SPICe+ (INC-32) for company incorporation, PAN, TAN, and GST registration, including the Section 8 license and MoA/AoA.
7. Receive Certificate of Incorporation: Upon approval, the RoC issues the Certificate of Incorporation and Corporate Identification Number (CIN), enabling the company to legally commence operations.

Post-Incorporation Compliance for Section 8 Companies

After incorporation, Section 8 Companies must adhere to specific compliance measures:

1. Annual Filing: File annual returns and financial statements with the RoC.
2. Income Tax Filings: Submit income tax returns yearly. They may also apply for tax exemptions under sections 12A & Section 80G.
3. Board Meetings: Conduct regular board meetings to maintain transparency.
4. Statutory Audit: Perform an annual audit by a Chartered Accountant to meet statutory requirements.
5. Books of Accounts: Maintain proper accounting records.

Conclusion

Incorporating a Section 8 Company provides a structured and legally compliant framework for pursuing charitable and non-profit goals.

 From applying through Form INC-12 to obtaining necessary licenses and fulfilling post-incorporation compliance, the process ensures that a Section 8 Company operates with full accountability and transparency.

This structure is ideal for those in Chennai and across India who wish to create an impact in education, healthcare, environmental causes, and social welfare. With its streamlined incorporation process and lasting tax benefits, a Section 8 Company is one of the most effective ways to formalize a non-profit organization in India.