Section 8 Company

A Section 8 Company is a non-profit organization incorporated under the Companies Act, 2013 for promoting charitable objectives such as education, social welfare, healthcare, environmental protection, art, culture, sports, research, and other socially beneficial activities.

Unlike other companies, the profits of a Section 8 Company are utilized solely for promoting its objectives and cannot be distributed as dividends to its members.

CorpAlign provides end-to-end assistance in the incorporation and compliance management of Section 8 Companies.

Our Services
• Section 8 Company Incorporation
• Name Reservation Assistance
• Digital Signature Certificate (DSC)
• Director Identification Number (DIN)
• Drafting of MOA & AOA
• Section 8 Licence Application
• PAN & TAN Registration
• CSR Registration Support
• 12A & 80G Registration Assistance
• Annual Compliance Support
• Governance and Regulatory Advisory

Key Features of Section 8 Company
• Registered under the Companies Act, 2013
• Formed for charitable or non-profit purposes
• No minimum capital requirement
• Separate legal entity with limited liability
• Eligible for tax exemptions subject to 12A & 80G registration
• Allowed to receive donations and grants
• No requirement to end the name with “ Private Limited “ or “Limited”

Objectives of a Section 8 Company
The primary objective of a Section 8 Company is to promote social welfare and charitable activities in areas such as:
• Education & Research
• Arts & Culture
• Science & Innovation
• Sports Development
• Environmental Protection
• Social Welfare & Charity
• Religious & Community Development

Any income earned must be utilized only for achieving these objectives.

A Section 8 registered Company is suitable for:
• Charitable organizations
• Educational institutions
• Social welfare initiatives
• Research and development organizations
• Environmental and sustainability projects
• Cultural, art, and sports promotion activities
• NGOs and community development organizations

A Section 8 Company can raise funds through:
• Domestic Donations
• Grants & CSR Funding
• Equity Contributions
• Foreign Contributions (subject to FCRA approval)

However, such companies cannot raise capital through public deposits.

Important Legal Conditions
• Profits cannot be distributed as dividends
• Income must be utilized only for company objectives
• MOA & AOA cannot be altered without prior approval of central Government.
• Non-compliance may result in penalties, revocation of license, or winding up

FAQs

Q1. Can a Section 8 Company earn profits?
A1. Yes, profits can be earned, but they must be used only for promoting the company’s objectives and cannot be distributed among members.

Q2. Is physical presence required for registration?
A2. No. The registration process can be completed online through document submission and digital verification.

Q3. Can NRIs or Foreign Nationals become Directors?
A3. Yes, NRIs and Foreign Nationals can become Directors, subject to compliance with applicable laws.

Q4. Can a Section 8 Company receive donations?
A4. Yes. A Section 8 Company can receive donations from individuals, corporates, and institutions, subject to applicable laws and regulations.

Q5. How long is the registration valid?
A5. The registration remains valid as long as annual compliances and legal requirements are regularly fulfilled.

Q6. Is registration under Section 12A and 80G mandatory?
A6. No. However, obtaining registration under the Income Tax Act can provide tax benefits to the organization and its donors.