Section 8 Company is a non-profit company incorporated under Section 8 of the Companies Act, 2013. It is formed to promote charitable or socially beneficial objectives and must use its income and profits only for furthering those objectives. It cannot distribute dividends to its members.

Section 8 Company may be incorporated for promoting activities such as:

• Education and research
• Commerce, art and science
• Sports
• Social welfare
• Religion and charity
• Environmental protection
• Healthcare and poverty relief
• Skill development
• Women and child welfare
• Other objects benefiting the public
• The proposed objects must be clearly stated in the company’s Memorandum of Association.

private Section 8 Company generally requires at least:

• Two members or subscribers
• Two directors

A public Section 8 Company generally requires at least:

• Seven members or subscribers
• Three directors
• The members and directors may be the same individuals. The proposed directors must fulfil the eligibility requirements prescribed under the Companies Act.

Yes. A Section 8 Company may earn income through donations, grants, subscriptions, membership fees, service charges, training programmes and other activities connected with its approved objects.

However, any surplus or profit earned must be used only for promoting the company’s charitable or non-profit objectives and cannot be distributed among its members.

No. A Section 8 Company is specifically prohibited from paying dividends to its members.

Members, directors or related parties may receive reasonable payments for genuine professional services, employment, reimbursement or property provided to the company, subject to proper approvals, documentation and compliance with the Companies Act and other applicable laws.

The documents generally required include:

• PAN and identity proof of subscribers and directors
• Address proof of subscribers and directors
• Passport-size photographs
• Digital Signature Certificates of proposed directors
• Proof of the proposed registered office
• Recent utility bill for the registered office
• No-objection certificate from the property owner
• Proposed Memorandum and Articles of Association
• Details of the proposed charitable activities
• Estimated income and expenditure
• Declarations in Forms INC-14 and INC-15
• Authorisation documents where a subscriber is a company or other body corporate

Additional documents may be required depending on the proposed objects, subscribers and structure of the company.

The registration process generally involves:

1. Obtaining Digital Signature Certificates for the proposed directors.
2. Applying for reservation of the proposed company name.
3. Preparing the Memorandum and Articles of Association.
4. Preparing declarations and supporting documents.
5. Filing the incorporation application through SPICe+ on the MCA portal.
6. Applying for Director Identification Numbers, where required.
7. Filing the linked forms for PAN, TAN and other integrated registrations.
8. Responding to any clarification or resubmission raised by the Registrar.
9. Receiving the Section 8 licence and Certificate of Incorporation.

New companies are required to use the SPICe+ web service for name reservation and incorporation.

There is no fixed statutory minimum capital requirement for incorporating a Section 8 Company.

It may be incorporated as a company limited by shares or as a company limited by guarantee. The appropriate structure should be selected according to its funding requirements, membership structure and proposed activities.

No. Incorporation as a Section 8 Company does not automatically provide income-tax exemption or allow donors to claim deductions.

The company must separately apply for the applicable charitable-institution registration and donor-deduction approval under the Income-tax law. Similarly, FCRA registration or prior permission is separately required before accepting foreign contributions.

A Section 8 Company must generally comply with requirements such as:

• Maintaining proper books of account
• Holding Board and general meetings
• Appointing a statutory auditor
• Preparing and filing annual financial statements
• Filing the company’s annual return
• Filing its income-tax return
• Maintaining statutory registers and minutes
• Applying its funds only towards approved objects
• Complying with donation-reporting requirements, where applicable
• Obtaining prior approval for material changes, where required
• Renewing tax registrations and other approvals within the prescribed time

Failure to comply with the conditions of the Section 8 licence may result in penalties, revocation of the licence or other regulatory action.