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Section 8 Company

Section 8 Company

A Section 8 Company, also known as a Non-Profit Organization (NPO) category of NGO, is formed with the primary objective of promoting charitable activities, social welfare, education, art, science, religion, or any other useful purpose. Here’s a concise overview of the process for registering a Section 8 Company in India:

  • Name Approval: Choose a unique name for the Section 8 Company. The name should end with “Foundation,” “Association,” “Society,” “Council,” “Club,” “Charity,” “Institute,” or other suitable terms.
  • Verify the name’s availability through the Ministry of Corporate Affairs (MCA) website.
  • Memorandum and Articles of Association (MOA and AOA): Draft the MOA and AOA outlining the company’s objectives and governing rules. The MOA should emphasize promoting charitable activities.
  • Digital Signature Certificate (DSC) and Director Identification Number (DIN): The proposed directors need to obtain their Digital Signature Certificate (DSC) and Director Identification Number (DIN).
  • Application for License: File Form with the MCA for obtaining a license to operate as a Section 8 Company.
  • License Issuance: Once the MCA reviews the application and documents, and if everything is in order, the license to operate as a Section 8 Company will be issued.
  • Compliance with Regulations: Ensure compliance with the regulations set forth for Section 8 Companies, including restrictions on the distribution of profits and utilization of funds for charitable purposes.
  • Board of Directors and Members: A Section 8 Company should have a minimum of two directors and a minimum of seven members for a private company, and three directors and eight members for a public company.
  • Tax Exemptions: Section 8 Companies are eligible for certain tax exemptions and benefits under the Income Tax Act.
  • No Dividends Distribution: Unlike for-profit companies, Section 8 Companies are not formed to distribute dividends to their members. Profits earned are plowed back into promoting the company’s objectives.
  • Statutory Reporting: Comply with annual reporting and other regulatory requirements, including filing financial statements, annual returns, and other necessary documents with the MCA.