A Section 8 Company is an NGO or a non-profit organization. In the context of India, it is registered under Section 8 of the Companies Act, 2013. These companies have started to encourage charitable activities such as:

• Art and Culture
• Education
• Environmental Protection
• Religion or Charity
• Social Welfare
•  Sports and Research

Key Point

Like other companies, a Section 8 NGO Company is not allowed to distribute profits to its members. Instead, all income should be reinvested in the advertisement of its objectives.

A Section 8 Company is also known as a Non-Profit Organisation (NGO) that is set up to encourage various social causes such as art, science, sports, religion, commerce, education, research activities, charity, or any other beneficial social cause. It is important to remember that any profits or donations received by the company are utilized mainly for the fulfillment of its objectives, and no dividends are paid to its members or owners.

The term “No Profit” does not indicate that the company cannot generate income or profit. Rather, it signifies that any income earned should be used to enhance the company’s mission and not distributed among its promoters. This allows the company to earn profits while ensuring that its promoters do not directly benefit financially.

Section 8 companies hold numerous privileges and exemptions under the Company Law, including:

• Non-applicability of Companies Auditor's Report Order (CARO)
• Exemption from the requirement of Minimum Paid-up capital
• Registered partnership firms can become members in their own right
•  Exemption from payment of Stamp duty for registration
•  Tax deductions granted to donors of the Company under section 80G of the Income Tax Act

To register an NGO Company, the following required aspects are –

• A minimum of 2 shareholders are required for a Private Limited NGO, while 7 shareholders are needed for a Public Limited NGO.
•  One of the directors should be an Indian resident.
•  A Director Identification Number (DIN) is mandatory for all directors.
• For a Private Limited Company, at least 2 directors are required, and for a Public Limited Company, 3 directors should be appointed.
• All directors should obtain a Digital Signature Certificate (DSC).
• It is allowable for the directors and shareholders to be the same individual.
• Proof of address for the proposed office location is necessary.
• PAN and Aadhaar Card of directors
•  Passport-sized photos
•  MOA (Memorandum of Association) and AOA (Articles of Association)
•  Utility bill (not older than two months)

1. Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN)The first step of the registration is to obtain the DSC for all proposed directors, as it is required for signing various electronic forms. Apply for DIN through the official portal of MCA. (if not obtained).

2. Apply for Name Reservation through the Reserve Unique Name (RUN) Form on the MCA Portal, file the RUN form to retain a unique name for your Section 8 Company. The name should match the company’s goals and comply with the naming guidelines issued by the Ministry of Corporate Affairs.

3. Draft Memorandum of Association (MOA) and Articles of Association (AOA) Design the MOA and AOA forms defining the company’s objectives and internal rules. Submit them along with the AGILE-PRO-S, INC-32, and other linked forms. These documents contain details of the registered office, directors, capital structure, etc.
4. Apply for a License under Section 8 Now, submit Form INC-12 as well as the prescribed fees and attachments, including declarations from directors and professionals and the draft MOA (INC-13), AOA. This step is important for receiving the license to run as a Section 8 Company.
5. Obtain Certificate of Incorporation from the Registrar of Companies (RoC) When all forms and documents are verified and approved successfully, the Registrar of Companies issues a Certificate of Incorporation, as well as the Section 8 license. The company can now start operations legally.

1. Attractive Tax Exemptions: One of the most significant advantages of a Section 8 company is that it is eligible for liberal tax concessions. When you register, you can apply under Section 12AA of the Income Tax Act for a complete exemption on the surplus income of the company, as long as it’s reinvested in your charitable causes. Apart from this, donations to your business are eligible for Section 80G deductions, which indicates donors themselves get tax exemption. This benefit tends to help you get considerably bigger surprises and regular supporters.
2. Increased Credibility and Public Trust: Section 8 companies are administered by the Ministry of Corporate Affairs and operated under the robust compliance standards of the Companies Act, which immediately displays openness and competence. Annual account filing, statutory auditing, and needing to hold a board meeting in regular intervals puts your activities subject to public gaze. Such higher level of transparency not only alleviates the risk concerns of grant-making authorities and corporate CSR units but also strengthens long-term rapport with individual benefactors, volunteers, and strategic partners.
3. No Prescribed Minimum Capital Requirement: Whereas private limited companies require a minimum paid-up share capital at the time of incorporation, a Section 8 company does not have any such requirement. This is a huge advantage for emerging NGOs or social enterprises that might not yet have deep pockets. You can begin with a token amount of capital—just sufficient to pay for basic registration charges—and build your funding structure organically as you achieve momentum and prove your impact.

4. Distinct Legal Entity: Once established, your Section 8 company is considered an individual legal person. It is allowed to accumulate and maintain wealth for its own sake, participate in obligatory contracts, and initiate transactions without asking its members. This enticing aspect guarantees that your welfare work has a strong reputation irrespective of membership or leadership changes.

5. Limited Liability Protection: Section 8 members are protected against personal financial exposure: their risk is limited purely to
   the size of capital subscribed and not yet paid. Neither creditors nor litigants may seek personal property—homes, savings, or investments—of your members or board to discharge organizational obligations. This protection appeals to qualified professionals to serve on your board with no fear of excessive legal or financial exposure.
6. Perpetual Succession: A Section 8 company holds uninterrupted continuity: it continues even in the event of the death, resignation, insolvency, or incapacity of a member or a director. In long-term projects such as building schools, running health camps, or running community centres—do not get stuck because of shifts in personnel. The organizational mission remains alive and strong, and governance is set up to incorporate or substitute people as and when required.
7. Simplified Access to Diverse Funding Channels: With Section 8 status, you open up multiple streams of support: CSR budgets of multinational and local corporations, foreign grants through FCRA registration, government-sponsored programs, and
   philanthropic foundations. The legally developed entity and compliance details on record decrease remaining diligence resistance, thus corporate donors and contributors can analyse your proposals fast. In the future, this efficient fundraising ability can significantly boost your organization’s growth and magnitude of impact.

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