Section 8 Company (NGO)

Section 8 company functions as an NGO dedicated to advancing various fields such as art, science, education, sports, and charitable activities. Unlike Trusts or Societies, profits generated by Section 8 Companies are reinvested to support their stated objectives rather than being distributed to company members. The registration process for a Section 8 Company falls under the jurisdiction of the Ministry of Corporate Affairs (MCA), distinguishing it from Trusts and Societies, which are governed by State Government Registrars. Opting for Section 8 Company registration through BizFinTax offers distinct advantages over Trusts and Societies. The Section 8 structure enhances credibility with government departments, stakeholders, and potential donors. At BizFinTax, our proficient team ensures a seamless registration process for your Section 8 Company. With expertise in documentation, application filing, and efficient incorporation, we alleviate your concerns, making the entire process smooth and effective.

Benefits of Section 8 Company Registration in India

Following are the advantages of Section 8 Company Registration in India:

• Separate Legal Entity : These types of companies in India are considered as a separate legal entity, which means that they can own property, sue or be sued in their name, and enter into contracts.
• More Trustworthy & Credibility : Due to its non-profit nature, Section 8 Companies are often viewed as more credible & trustworthy than other types of Companies.
• Nil Stamp Duty : These Companies are exempted from paying stamp duty on their Registration Documents.
• Minimum Share Capital : These companies don’t have any minimum capital requirement.
• No Minimum Capital is required : In India, Section 8 Companies do not have a minimum capital requirement and they can adjust their capital structure as per their growth and give them more flexibility.
• Exemption to Donors : Tax exemption is only allowed to the donations received by the Section 8 Company under Section 12A & 80G of the Income Tax Act.

Checklist for Section 8 Company Registration in India

Following are some vital requirements for Section 8 Company Registration:

• Directors : For Section 8 Company Registration in India, a minimum of 2 Directors are required.
• Capital Requirement : There is no minimum paid-up capital for the Registration of Section 8 Company. NGOs in India established as a Section 8 company need not use the words Private Limited or Limited in their name.
• Management : Section 8 Company is managed by the BoD (Board of Directors) as per AoA & MoA of the Company, unlike other Trusts that are handled by the Trustees as per the Trust Deed.
• Regulation under various Acts: Section 8 Company needs to follow the Rules & Regulations prescribed under the Companies Act, 2013. It needs to file returns & maintain Books of Account with ROCs. Section 8 Company can’t make any alterations to the provisions of Memorandum of Association (MoA) & Articles of Association (AoA) without prior consent of the Central Government and it should follow the provisions of the GST Law & Income Tax Act.
• Charitable Objects : In India, Section 8 Companies are registered with non-profit objectives. The AoA & MoA must mention the purpose for which it is set up. Any profits earned by the Section 8 Company is utilised for the furtherance of its main objectives i.e., charitable purposes in the Company. The profits will not be distributed among its members.
• DSC and DIN : DSC or Digital Signatures of all the proposed Company’s Directors are necessary for the Registration because the forms for the Registration process are filed online & should be digitally signed. Apart from DSC, you need to apply for DIN for the Directors and the application for allotment of DIN must be filed in Form DIR-3 or along with the SPICe+ Form for the Registration.

Documents Required for Section 8 Company Registration in India

Following are some crucial documents required for Registration of Section 8 Company:

Identity/Address proof of Directors or Shareholders:

• Passport size photographs of Directors/Shareholders
• Copy of Pan card
• Copy of DL or Voter ID
• Copy of latest bank statement & utility bills
• Copy of Aadhar Card
• Copy of Passport (In case of NRI or Foreign National)

Address proof of Registered Office:

• Copy of latest electricity bill or water bill or gas bill (not older than 2 months)
• In case of rented office, Rent Agreement is required
• NOC from the property owner

Other Documents:

• MoA & AoA
• Estimated Income & Expenditure
• Consent of Nominee (INC-3)
• DSC (Digital Signature Certificate)
• Declaration by the 1st Director Subscriber (INC-15)(an affidavit is not required)
• INC-14 Declaration by Professional (CA/CS/CMA)
• Copy of Incorporation Certificate of an overseas corporate body (if any)
• A Resolution passed by the promoter company
• Declaration of unregistered companies
• Residential & identity proof of subscribers & nominees

A Section 8 Company is a special type of NGO that promotes social welfare, education, and other charitable objectives without distributing profits among its members. It is governed by the Companies Act, 2013, and offers numerous benefits like tax exemptions, limited liability, and high credibility among stakeholders. Biz Fin Tax specializes in simplifying Section 8 Company registration by offering end-to-end assistance in document preparation, legal compliance, and incorporation. Whether you’re planning to start an NGO or scale up your social impact initiatives, we provide reliable and affordable services to ensure a seamless registration process.