A Section 8 Company is the most credible and structured form of non-profit organisation in India. Unlike a trust or society, it is incorporated under the Companies Act 2013 and regulated by the MCA — giving it the same legal standing as a Pvt Ltd company, but with a non-profit mandate. If you are setting up a charitable organisation, educational institution, sports body, or social enterprise, understanding the Section 8 structure is essential.
Step-by-Step Process
Section 8 vs Trust vs Society — which is right for your NGO?
Trust: Simplest to form (registered under the Indian Trusts Act 1882 or state acts), governed by a Trust Deed, minimum 2 trustees. Least regulated and least credible with institutional donors. Society: Registered under the Societies Registration Act 1860, governed by a Memorandum and Rules, minimum 7 members. Moderate regulation. Section 8 Company: Incorporated under the Companies Act 2013, governed by MoA and AoA, minimum 2 directors. Most regulated, most credible with FCRA, CSR, and institutional donors. Most Section 8 Companies apply for 80G (donor tax exemption) and 12A (income tax exemption) after incorporation.
Step 1 — Get DSC and reserve name
Obtain DSC for all proposed directors. Names of Section 8 Companies must include words like Foundation, Forum, Association, Federation, Chambers, Confederation, Council, or Electoral Trust. Apply for name reservation using Part A of SPICe+ form on the MCA V3 portal. The ROC checks for existing identical or similar names and approves within 1–2 days.
Step 2 — File Form INC-12 for the Section 8 licence
Form INC-12 is the application for the Section 8 licence from the Regional Director of MCA. Along with it, submit: draft MoA and AoA showing the company will apply income exclusively for promoting its objectives and will not pay dividends, a declaration by an Advocate or CA or CS that the proposed company fulfils the conditions for Section 8 status, and estimated income and expenditure for 3 years. The Regional Director typically takes 15–30 days to grant the licence.
Step 3 — Incorporate and apply for 12A and 80G
After receiving the Section 8 licence, file SPICe+ Part B for incorporation. Receive the Certificate of Incorporation. Then apply for 12A (income tax exemption for the organisation) and 80G (tax deduction benefit for donors) simultaneously through Form 10A and Form 10G on the Income Tax portal. These are typically granted within 3–6 months and are valid for 5 years initially, then renewable.
Frequently Asked Questions
8 questions answered by our legal experts
1Can a Section 8 Company pay salaries to its founders?
2What is the minimum number of directors for a Section 8 Company?
3How long does Section 8 Company registration take?
4Can a Section 8 Company receive CSR funding from companies?
5What happens to the assets of a Section 8 Company if it dissolves?
6Do Section 8 Companies need to file annual returns with MCA?
7Can a Section 8 Company undertake commercial activities?
8What is FCRA registration and does a Section 8 Company need it?
Ready to get this done?
Our legal experts handle everything — documents, filings, follow-ups — so you can focus on your business.