BBNC

Section 8 Company


When a company registered as a Non-Profit Organization (NPO). It is called as section-8 company. The motives of section 8 companies are to promote Arts, Commerce, Education, Charity, Protection of environment, Research, sports, science, social welfare, religion. and intend to use the profit of the company or other income only for promoting these objects.
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Overview

Section 8 companies are registered under the companies act 2013. Income of section 8 company (Non-profit organization) cannot be used for paying out dividends to the company’s shareholders. Same should be used for promotion of the charitable objectives. Section 8 companies are liable to the adhere rules specified by the government.

According to the government rules of section 8 company. If a company fails to comply with the responsibilities stated by the central government may lead to closure of the company on the orders of the government. Besides these strict legal actions will be taken against all the members of the company.

An estimation of the company’s future annual income and expenditure for the next three years, mentioning the sources of the income and the purpose of the expenditure needs to be submitted at the time of incorporation.

Carrying out operations of a section 8 company is similar to public limited company. Even the rights and duties of section 8 and public limited company are similar.



Benefits of Section 8 Company

Below are the list of advantages and benefits of forming a Section 8 Company

Limited Liability

Shareholders of the Section 8 company has given limited liability protection. In case of unexpected losses and liabilities of the company, personal properties of the shareholders are protected. The liability of company’s shareholders are limited only to the face value of the shares they take over.

Legal Entity

Section 8 company is a separate legal entity, which has a true existence. Just like private limited company hence section 8 companies may own properties on its own name and also incur debts on its own name.

No Capital Cap

There is no minimum capital requirement of a section 8 company. as per the companies act 2013 you can start a section 8 company with 0 paid up capital.

No Suffix

Section 8 companies may not use suffix like private limited or limited company. It is optional for Nonprofit organizations.

Tax Benefits

Nonprofit organizations may enjoy tax benefits if It gets registration under 80G 12AA of Income Tax act.

Reduced stamp duty charges

For section 8 companies, stamp duty charges are comparatively less than private and public limited companies. The government gives privilege on the incorporation of the company.

Checklist/Requirements

Basic Requirement

• At least 1 Director is required – There is No limit for Maximum directors.
• Required a women director in specified class of Companies.
• An address which acts as a registered address of the company

Documents requirement

For Each Director and shareholder of Section 8 Company
1. PAN card* (Mandatory for Indians & others if held)
2. Passport* (for NRI, Foreigners, and Indians if held)
3. Address proof (any 1 of) (Not more than 2 months old)
  a. Bank Statement
  b. Phone Bill
  c. Mobile Bill
  d. Electricity Bill

(Note - For NRI & Foreigners Documents issued by foreign authorities or signed outside India must be notarized & apostilled)

For Registered Address
  1. NOC from Owner*
  2. Rent Agreement*
  3. Utility Bill*

How to Register Section 8 Company?

Once the founders of the company finalize on the name of the company. Then the process of incorporation of Section 8 Company starts as below.

Step 1: Application for DSC (Digital signature certificate) and DIN (Directors Identification Number)

Step 2: Apply for the Name reservation

Step 3: Drafting & filing MOA & AOA to register the Section 8 Company

Step 4: Apply for the PAN and TAN of the company

Step 5: Issue Certificate of Incorporation along with PAN and TAN of the company

Key Deliverables

a. DSC of directors and shareholders

b. PAN and TAN number

c. Certificate of incorporation

d. MOA & AOA of the company

Section 8 Company incorporation

Why Choose Us

Entrepreneur Friendly

We make the process so easy and fast that you will not even feel the headache of all the paperwork, and our professionals will provide you all the promised deliverable within a given span of time.

Experienced Professionals

All our professionals are qualified and specialized in that particular work. Making sure no mistakes are done at the time of filings with the authorities so that company won’t have to pay any penalties due to mistakes.

One Stop for All Your Requirements

We support you throughout the journey of your business, from the incorporation, Accounting and taxation support, Secretarial compliance support, and Legal support.

Cost-Effective

We believe that cost plays a vital role in any company’s growth stage, that’s why we do not surprise our clients with hidden charges, you pay what you see in the initial proposal.


Frequently Asked Questions


Section 8 company is governed by the companies act 2013, whereas trust is governed by The Indian Trust Act 1882. Some of the states also has different trust acts. And the society is governed by The Societies Registration Act 1860.
Any individuals or group of individuals can apply for section 8 company registrations, only minors (below 18 years old) cannot incorporate a section 8 company.
The 80G Certificate exempts the individuals from paying taxes who have made donations to a charitable organization such as section 8 company. There is maximum allowable deduction criteria to this.
Registration under this section will be processed by the commissioner of Income-tax after receiving an application from the applicant in Form 10 G.
We at BBNC can get you the company incorporated in 20-30 days of time. Subject to receiving documents on time from the client end.
No. Section 8 companies are mandatorily required to file MOA and AOA as pdf attachments to SPICe (INC-32).