Overview
A Section 8 company is a company formed under the Companies Act, 2013 to promote objects such as charity, education, science, art, sports, social welfare or environmental protection. Any profit must be applied to those objects and cannot be distributed to members.
Unlike an ordinary company, it needs a licence from the Regional Director at the Ministry of Corporate Affairs before it is incorporated. The application is made through the SPICe+ form together with a licence application and a declaration of the organisation's objects and plans.
A Section 8 company can accept donations and grants. To offer tax benefits to donors, it needs separate registrations under the Income-tax law, and for foreign donations, under FCRA.
Is a Section 8 company the right fit?
It suits organisations that want scale, structure and credibility for a non-profit mission.
Usually a good fit if
- You plan to run a non-profit with a board, formal accounts and multiple donors.
- You want a stronger legal structure than a society or a simple trust for grants and CSR funding.
- You want limited liability for members and directors.
- Your objects fall within the activities the law recognises.
Think twice if
- You want to share profits among members; a Section 8 company cannot do that.
- You are a very small group with a one-off activity; a trust or society may be quicker and cheaper.
Key benefits
Limited liability
Members and directors are protected from the organisation's debts.
Credibility
Corporate registration reassures donors, banks and CSR partners.
Perpetual existence
The organisation continues regardless of changes in its members.
Eligible for CSR funding
Many companies prefer to fund registered non-profit companies, subject to the usual registrations.
Exemptions
Certain registration and filing requirements are relaxed for such companies.
Clear governance
Board, accounts and filings create discipline and trust.
What we need from you
The licence application needs more than a normal company, because the registry wants to see your objects and plans.
For directors and members
- PAN and Aadhaar
- Identity and address proof (recent utility bill or bank statement)
- Passport-size photographs
- Mobile number and email address
- Digital Signature Certificate
For the registered office
- Recent utility bill
- Rent agreement and no-objection letter from the owner, or proof of ownership
For the licence application
- Statement of the main objects and how they will be pursued
- Estimated income and expenditure for the next three years
- Declaration by directors about the application of income and no dividend payments
- Draft Memorandum and Articles prepared in the Section 8 form
Information we will ask you for
- Proposed name, which usually ends with Foundation, Forum, Association or similar
- Details of the founding members and directors
- Sources of expected funds
How the process works
Define the objects 2 to 4 days
We help you word the objects so they are charitable or non-profit in character and acceptable to the registry.
Name approval and digital signatures 2 to 4 days
A name is proposed and every proposed director obtains a Digital Signature Certificate.
File SPICe+ with the licence application 3 to 5 days
The incorporation form, licence application, draft MoA and AoA, projections and declarations are filed together.
Review by the Regional Director 2 to 4 weeks
The licence application is examined, and queries are common at this stage.
Licence and certificate On approval
After approval you receive the licence and the Certificate of Incorporation.
Tax registrations for donors Weeks
Applications under the income tax rules for exemption and donor deductions, which are separate steps.
How long it takes
| Preparation and filing | 1 to 2 weeks |
| Registry review and licence | 2 to 4 weeks |
| Overall to incorporation | Roughly 4 to 8 weeks |
The review stage is the least predictable. Clear, specific objects and complete projections shorten it.
What a Section 8 company must do
Compliance is closer to an ordinary company than most founders expect.
- Annual filingsFinancial statements and an annual return with the registrar, like other companies.
- AuditAccounts must be audited every year.
- Application of incomeSurplus must go back into the objects, never to members.
- Tax registrationsMaintain exemption registrations for the organisation and donors, and file the returns they require.
- Foreign fundsIf you receive foreign contributions, separate FCRA registration and returns apply.
Frequently asked questions
Can a Section 8 company earn a profit?
Yes, it can earn surplus, but the surplus must be used for its objects and cannot be paid as dividend to members.
How many people do I need?
A private Section 8 company needs at least two members and two directors, at least one of whom must be an Indian resident.
Is there a minimum capital?
No minimum capital is prescribed, although you should show how you will fund activities in your projections.
Will my donors get tax benefits automatically?
No. Donor deductions and the organisation's own exemption depend on separate registrations under the income tax law.
Can it receive foreign donations?
Only after separate FCRA registration or prior permission, which is a different process.
How is it different from a trust or society?
A Section 8 company is a corporate entity under company law with ongoing ROC compliance, limited liability and an audit, while trusts and societies are governed by other laws with different formalities.
This page is general information to help you prepare, not legal, tax or professional advice for your situation. Rules, forms, thresholds and due dates change, so we confirm the current position before we file anything for you. Taxswami Consultants is an independent professional services firm and is not a government body.