Overview of Section 8 Company
A Section 8 company is a company registered under the Companies Act, 2013 whose profits go back into its charitable or social objects and are never paid out to members as dividends. To set one up, you obtain a licence from the Ministry of Corporate Affairs (MCA) through the SPICe+ incorporation filing. You then apply to the Income Tax Department for tax exemption and donor-deduction approval. This page covers who qualifies, what the filing needs, which clauses your MOA and AOA must carry, and what the law expects of you once you are registered.
Key Takeaways
A Section 8 company can be formed for charity, education, science, research, art, sports, social welfare, religion, environmental protection, or similar purposes.
You need a licence under Section 8 of the Companies Act, applied for through SPICe+ together with the licence form (INC-12).
There is no minimum capital. A private Section 8 company needs two directors and two members. A public one needs three directors and seven members.
Tax exemption and donor deductions are separate approvals from the Income Tax Department. They are commonly called 12A and 80G, and the Income-tax Act, 2025 has renumbered them.
A Section 8 company files annual returns and audited accounts with the MCA every year. That is a heavier load than a trust or society carries.
What Is a Section 8 Company?
Section 8 of the Companies Act, 2013 allows a company to be licensed when its objects are promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or a similar purpose. It must intend to apply its profits and income to those objects, and its constitution must forbid dividends to members.
The company is its own legal person, with perpetual succession. Members' liability is limited, and it can hold property and sign contracts in its own name. A Section 8 company may leave "Limited" or "Private Limited" out of its name, which is why you see organisations called a Foundation, Forum or Association that are really companies.
Earning a surplus is fine. The restriction is on where the surplus goes: back into the mission, never to members. Reasonable pay to people for services actually rendered is a different matter from a dividend, and your deed should spell out who may be paid for what.
Section 8 Company Eligibility Criteria
Check these requirements before you start the filing.
| Requirement |
Rule |
| Objects | Must fall within the Section 8 purposes and be genuinely non-profit |
| Dividends | Prohibited; profit must be applied to the objects |
| Company type | Private or public |
| Directors | Minimum 2 for a private company, 3 for a public company |
| Members | Minimum 2 for a private company, 7 for a public company |
| Resident director | At least one director who has stayed in India for 182 days or more in the financial year |
| Minimum capital | None |
| Eligible founders | Individuals, and in some cases other legal entities, subject to the rules |
| Registered office | Address in India with proof of the right to use it |
Individuals who have no history of disqualification under the Companies Act can serve as directors. If you plan to take foreign funds, the director and member profile also matters for FCRA, covered in the 12A and 80G section below.
Benefits of a Section 8 Company Over a Trust or Society
Trusts and societies are the older and simpler options. Which one fits depends on how much oversight you want and how much compliance you can handle.
| Point |
Section 8 company |
Trust |
Society |
| Governing law |
Companies Act, 2013 (central) |
Indian Trusts Act or state laws |
Societies Registration Act, 1860 or state laws |
| Registering body |
MCA (licence and incorporation) |
Sub-registrar for the deed |
Registrar of Societies |
| Legal personality |
Separate legal entity |
Trustees hold property; trust is not a company |
Society can sue and be sued in its name |
| Annual filings |
MCA returns and audited accounts every year |
Mainly income tax |
State-level filings plus income tax |
| Oversight |
High; MCA supervises |
Lower |
Moderate |
| Governance expectations |
Board, AGM, statutory auditor |
Trustees under the deed |
Governing body under bylaws |
The advantages are practical. Companies law is uniform across the country, so a Section 8 company in Rajasthan and one in Kerala follow the same framework, whereas trust and society law varies by state. The governance structure is also familiar to institutional funders, and some corporate donors find it easier to evaluate. For example, the Companies (CSR Policy) Rules, 2021 allow a company's CSR funds to go to implementing agencies that are Section 8 companies, registered trusts or registered societies holding 12A and 80G registration, provided the agency registers with the MCA in Form CSR-1.
The costs are just as real. You will pay a professional auditor every year, file returns with the MCA, hold annual meetings, and live with the Registrar's oversight. A small community group that wants minimal paperwork is usually better served by a trust or society. If you are building a revenue-generating venture instead, look at
Private Limited Company Registration
or
LLP Registration Online.
Section 8 Company Registration Process
The process is longer than a regular company incorporation because the Registrar reviews your objects and financial projections before issuing the licence. Plan for several weeks rather than days. That is our own estimate, since timelines depend on the office and on how many queries come back.
1
Digital signatures and DINs
Every proposed director needs a Class 3 Digital Signature Certificate (DSC) and a Director Identification Number (DIN). The DIN can be requested within the SPICe+ filing if a director does not hold one.
2
Name approval
Propose a name through SPICe+ Part A. The name should signal the non-profit purpose and avoid anything suggesting a commercial business. It must not clash with an existing company, LLP or registered trademark, so run a trademark search first. Our team covers brand protection under Trademark Registration India.
3
Draft the MOA, AOA and projections
Prepare the Memorandum of Association (MOA), Articles of Association (AOA), and a statement of estimated income and expenditure for the next three years, showing your sources of income and how you will spend them. The Registrar reads this closely. Vague or unrealistic projections draw queries.
4
File SPICe+ with the licence application
File SPICe+ on the MCA portal with the licence application (Form INC-12). The filing is accompanied by linked e-forms covering the MOA and AOA, a declaration by the professional (a chartered accountant, company secretary, cost accountant or advocate) and declarations by the subscribers and first directors. All are signed with DSC. Form numbers and attachments change when the MCA updates the portal, so confirm the current list on the MCA portal.
5
Registrar review, licence and certificate
If the Registrar is satisfied, the licence is issued under Section 8 (in Form INC-16), and the Certificate of Incorporation follows with the company's CIN. A query will pause the file until you respond.
6
PAN, TAN and bank account
The company's PAN and TAN are generally allotted through the incorporation filing. With the certificate and these numbers, you can open a current account in the company's name.
7
Apply for the tax approvals
Apply for income tax exemption and donor-deduction approval as soon as you are eligible. The 12A and 80G section below explains how.
Documents Required for a Section 8 Company
Collect these before you start the filing:
| For |
Documents |
| Each director and subscriber | PAN, Aadhaar or another identity proof, address proof, passport-size photograph, email and phone number |
| Foreign directors or members | Passport and overseas address proof, usually notarised or apostilled |
| Registered office | Recent utility bill or property tax receipt; if rented, rent agreement and the owner's no-objection letter |
| Incorporation set | MOA, AOA, statement of estimated income and expenditure for three years |
| Declarations | By the professional and by subscribers and first directors |
| Digital identity | Class 3 DSC for each signatory |
Stamp duty on the MOA and AOA varies by state, so check your state's schedule.
MOA and AOA Clauses a Non-Profit Company Needs
The MOA and AOA are where a Section 8 licence is won or lost. Registrars look for specific commitments, and a document copied from a for-profit template will not pass.
In the MOA
- Objects clause. State the charitable or social purposes in clear, specific language. Avoid listing commercial activities.
- Profit application. A statement that profits and income will be applied solely to promote the objects.
- No dividends. An express prohibition on dividends to members.
- Liability. Members' liability is limited, and the guarantee or share structure is stated.
- Winding up. Surplus assets on winding up go to another Section 8 company with similar objects and are not distributed to members.
In the AOA
- Rules on admitting and removing members.
- How the board is appointed, how long a director serves, and when a seat falls vacant.
- Meetings, voting and quorum.
- Rules on payments to directors and members for services, so that any remuneration is for actual work and reasonable.
- Accounts and audit arrangements.
Changing the objects later is not a routine amendment. A Section 8 company needs the Central Government's prior approval to alter its MOA in this respect. So write the objects clause carefully the first time, wide enough to cover your growth but still specific.
12A and 80G Tax Exemption for a Section 8 Company
Being a Section 8 company does not by itself exempt your income from tax. You need two separate approvals from the Income Tax Department, usually called 12A and 80G.
12A (registration for exemption). This is what lets your surplus, applied to charitable purposes, escape income tax.
80G (donor approval). This lets donors claim a deduction on their gifts, which makes fundraising easier. Under the older regime, 12A registration was a precondition for 80G.
Note on the new law. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. According to tax commentary on the new Act, registration of trusts and institutions now sits under Section 332, and approval for donor deductions under Section 354, with the actual deduction in Section 133. Organisations holding a valid 12A or 12AB registration on 1 April 2026 are reported to be treated as Registered Non-Profit Organisations automatically, while lapsed ones need a fresh application. New forms also apply. Everyone still calls it "12A and 80G", but the section numbers, forms and renewal timelines you will actually file under have changed. Check the current requirements on the Income Tax Department portal or ask your adviser before you file.
Two practical points hold across both regimes. First, apply early, because exemption generally runs only from the registration date and you lose tax benefit during any gap. Second, keep your books, bank statements and activity records tidy, because the tax officer will examine them when you apply and when you renew.
If you will accept donations from abroad, you also need registration under the Foreign Contribution (Regulation) Act, 2010 with the Ministry of Home Affairs. It is a separate process from both the MCA licence and the tax approvals.
Compliance After Your Section 8 Licence
Keep these in your compliance calendar from day one.
| Obligation |
Notes |
| Statutory auditor | Appointed and filed with the Registrar; audit is mandatory every year |
| Annual general meeting | Held within the period the Companies Act allows |
| Financial statements | Filed with the MCA (Form AOC-4) after the AGM |
| Annual return | Filed with the MCA (Form MGT-7) after the AGM |
| Director KYC | Each DIN holder files annual KYC with the MCA |
| Income tax return | Filed every year; forms follow the Income-tax Act, 2025 from Tax Year 2026-27 |
| Tax approvals | Track renewal dates for exemption and donor approvals |
| FCRA | If you hold foreign-contribution registration, file its annual returns |
| GST | Registration depends on the services you supply and your turnover |
Some Section 8 companies get relaxations from certain Companies Act requirements, and the rules have been adjusted over time, so check the current exemptions. If you do supply taxable services, our page on
Online GST Registration Services
explains the registration thresholds.
Treat the licence conditions seriously. The Central Government can revoke a Section 8 licence where the company breaches its conditions or acts against its objects. If that happens, the assets must go to a similar non-profit and cannot be handed to members.
Frequently Asked Questions
Got questions? Find clear answers from our legal advisory team:
Individuals, and in some cases other entities, with a genuine non-profit purpose. You need at least two directors and two members for a private company, and three directors and seven members for a public one.
No. A Section 8 company may omit "Limited" or "Private Limited". Many choose names ending in Foundation, Forum or Association.
Yes, but it must be applied to the objects. Dividends are prohibited.
Reasonable remuneration for services actually rendered can be provided for in the constitution, but profit cannot be distributed. Draft this clause with care.
12A exempts your surplus from tax. 80G lets donors claim a deduction. Most NGOs want both, since donors often ask for 80G.
The Act was brought into force on 1 April 2026 and renumbered these provisions. Check current sections and forms with the Income Tax Department before filing.
Under the CSR Policy Rules, 2021, an implementing agency that is a Section 8 company must hold 12A and 80G registration and register with the MCA in Form CSR-1.
Only with FCRA registration from the Ministry of Home Affairs.
Conversion routes exist under company law and your state's society law, but the steps depend on your current structure. Take advice before starting.
Start Your NGO Registration with LegalDev India
The LegalDev Compliance Team consists of legal professionals and NGO compliance strategists with more than eight years of experience in MCA Section 8 licensing, 12A and 80G registrations, and non-profit corporate compliance across India. We prepare your name application, draft the MOA and AOA, assemble the three-year projections, file SPICe+ with the licence application, and guide the tax approvals that follow.
Tell us your mission, the people who will serve as directors, and how you expect to fund the work. We will tell you whether a Section 8 company is the right vehicle, or whether a trust or society would serve you better. Reach us through
LegalDev India
to begin.