A Section 8 Company is a non-profit company incorporated under the Companies Act 2013 (Section 8) for charitable, educational, scientific, religious, social welfare, or sports promotion purposes. Unlike a trust or society, a Section 8 company is incorporated with the MCA and gives the organization the credibility and legal structure of a company — while all profits are mandatorily reinvested in the stated objectives.
Section 8 Company vs Trust vs Society
| Feature | Section 8 Company | Trust | Society |
|---|---|---|---|
| Governing Act | Companies Act 2013 | Indian Trusts Act 1882 | Societies Reg Act 1860 |
| Registration | MCA (Central) | State level | State level |
| Management | Board of Directors | Trustees | Managing Committee |
| Credibility | Highest | Moderate | Moderate |
| Foreign funding | FCRA easier | Complex | Moderate |
| 12A/80G | Easily available | Available | Available |
| Annual compliance | Higher (MCA) | Lower | Lower |
Who Can Form a Section 8 Company?
Minimum requirements:
Prohibited: Distributing profits, dividends, or assets to members. All income must be applied toward the stated charitable objectives.
- ▸2 directors (minimum)
- ▸2 shareholders (minimum) — can be same persons
- ▸At least 1 Indian resident director
- ▸License from Regional Director, MCA (approval needed before incorporation)
Documents Required
- ▸PAN and Aadhaar of all directors
- ▸Address proof of registered office (rent agreement + NOC)
- ▸Photographs of directors
- ▸Memorandum of Association (MoA) and Articles of Association (AoA) — drafted for charitable objectives
- ▸Declaration by directors (INC-14 and INC-15)
- ▸Statement of Income and Expenditure (estimated for first year)
Registration Process
Step 1: Obtain DSC for all proposed directors
Step 2: Apply for name approval via RUN (Reserve Unique Name) on MCA portal
Step 3: File SPICe+ form along with specific attachments for Section 8 (including Form INC-12 — application for license)
Step 4: Regional Director reviews and grants license — this takes 30–60 days
Step 5: After license grant, file incorporation forms → Certificate of Incorporation issued
Step 6: Apply for PAN, TAN, and bank account
Step 7: Apply for Section 12A and 80G registration (see below)
Section 12A and 80G Registration
Section 12A — Grants income tax exemption to the NGO on its income (subject to conditions like 85% application rule)
Section 80G — Allows donors to claim deduction on donations made to your NGO (50% or 100% depending on category)
Application: File Form 10A online on the Income Tax portal. Under the new law (amended in 2021), both 12A and 80G registration are valid for 5 years and must be renewed.
Annual Compliance for Section 8 Companies
- ▸Board meetings: 4 per year (every quarter)
- ▸Annual General Meeting: Every year before September 30
- ▸MCA filings: AOC-4 (financial statements), MGT-7A (annual return) — annually
- ▸Income tax return: ITR-7 (for Section 8 companies with 12A)
- ▸FCRA return: If receiving foreign contributions — FC-4 annually
Conclusion
Section 8 Company is the most credible form for NGOs, educational institutions, and social enterprises. With central MCA registration, it enjoys acceptance from government departments, FCRA, and CSR donors. Biswa Corporate Solutions provides end-to-end Section 8 company registration including MoA/AoA drafting, license approval, incorporation, and 12A/80G applications.
