Section 8 Company (NGO): Licence, 12A & 80G Registration Guide (2026)

Why Choose Section 8 Over Trust or Society?

Parameter	Section 8 Company	Trust	Society
Governing law	Companies Act, 2013	Indian Trusts Act, 1882	Societies Registration Act, 1860
Registration	Central (MCA — pan-India)	State-level (Sub-Registrar)	State-level (Registrar of Societies)
Credibility	Highest (regulated by MCA, audited)	Moderate	Moderate
FCRA eligibility	Yes	Yes	Yes
CSR funding eligibility	Yes (preferred by corporates)	Yes	Yes
Governance	Board of Directors, AGM, statutory audit	Trustees (flexible)	Governing body
Geographical scope	Pan-India (single registration)	State-specific	State-specific

Our recommendation: If the NGO plans to receive CSR funding from corporates, apply for FCRA registration for foreign donations, or operate across multiple states, a Section 8 company provides the strongest governance framework and highest credibility. Corporates with CSR obligations under Section 135 of the Companies Act strongly prefer channelling funds through Section 8 companies due to audit and compliance transparency.

Registration Process

Step 1: Obtain DSC and DIN

Same as Pvt Ltd registration — all proposed directors need DSC and DIN. Minimum 2 directors required.

Step 2: Name Reservation via RUN

Reserve the company name through RUN on the MCA portal. Section 8 companies are exempt from using “Private Limited” or “Limited” in the name — they can use names like “Foundation,” “Forum,” “Council,” “Association,” or any other name approved by the Central Government. This exemption is granted under Section 8(1) and is a key advantage for NGO branding.

Step 3: Apply for Section 8 Licence (Form INC-12)

This is the additional step that differentiates Section 8 registration from regular company registration. The application for licence is filed in Form INC-12 with the Regional Director (under the Central Government).

Documents required with INC-12:

• Draft MOA and AOA of the proposed Section 8 company
• Declaration by each applicant in Form INC-14 (by a CA/CS/Cost Accountant in practice)
• Declaration by each applicant in Form INC-15
• Estimated annual income and expenditure for the next 3 years
• Statement of assets (if any) of the applicants proposed to be transferred to the company
• Brief description of the objects of the proposed company and how the objects will be promoted

Processing: The Regional Director examines the application, may seek objections from the public (published on the MCA website for 30 days), and issues the licence in Form INC-16 if satisfied that the requirements of Section 8 are met.

Timeline: 15-30 working days for licence issuance. This is the primary reason Section 8 registration takes longer than regular Pvt Ltd registration.

Step 4: File SPICe+ for Incorporation

After receiving the Section 8 licence, file SPICe+ Part B (INC-32) with the licence attached. The incorporation process is identical to a regular Pvt Ltd — PAN, TAN, EPFO, ESI, and bank account are allotted through the integrated process.

Step 5: Obtain 12A Registration

Section 12A/12AB of the Income Tax Act grants income tax exemption to trusts, societies, and Section 8 companies whose income is applied for charitable or religious purposes. Without 12A registration, the company’s income is taxable at normal corporate rates.

New regime (effective April 2021): Under the amended provisions, a newly registered Section 8 company must apply for provisional 12A registration in Form 10A within the prescribed time. The provisional registration is valid for 3 years. Before expiry, the company must apply for regular 12A registration in Form 10AB, which is valid for 5 years and renewable.

Filing: Application in Form 10A filed electronically on the Income Tax e-filing portal. Processing time: 30-45 days.

Step 6: Obtain 80G Registration

Section 80G of the Income Tax Act allows donors to claim a tax deduction for donations made to approved institutions. Without 80G registration, donors to the Section 8 company cannot claim any tax benefit — which significantly reduces the company’s fundraising ability.

80G registration process: Similar to 12A — apply for provisional 80G registration in Form 10A (same form, different section), valid for 3 years. Then apply for regular 80G registration in Form 10AB before expiry.

Deduction available to donors: 50% of the donation amount (for most Section 8 companies) or 100% (for specific categories like the Prime Minister’s National Relief Fund). The qualifying limit is 10% of the donor’s adjusted gross total income.

FCRA Registration for Foreign Donations

If the Section 8 company plans to receive donations from foreign sources (foreign governments, foreign companies, foreign citizens, or international NGOs), it must obtain registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA).

Eligibility: The Section 8 company must have been in existence for at least 3 years and must have spent at least Rs 15 lakh on its stated objects during the 3 preceding financial years. A newly registered company can apply for prior permission (project-specific) even before completing 3 years.

FCRA designated bank account: Under the FCRA Amendment Act, 2020, all foreign contributions must be received in a designated FCRA account with the main branch of State Bank of India, New Delhi. The funds can then be transferred to a utilisation account in any scheduled bank.

Annual FCRA return: Form FC-4 must be filed by 31 December every year with details of foreign contributions received and utilised.

Key Restrictions on Section 8 Companies

• No dividend: Profits must be applied solely towards promoting the company’s objects. No dividend or surplus can be distributed to members.
• No alteration without permission: The company cannot alter its MOA or AOA without the prior approval of the Central Government.
• Licence revocation: The Central Government can revoke the Section 8 licence if the company’s affairs are conducted fraudulently, in a manner violating its objects, or contrary to the conditions of the licence. Upon revocation, the company must either wind up or convert to a regular company (and the “not-for-profit” exemptions cease).
• Amalgamation restriction: A Section 8 company can only merge with another Section 8 company, not with a for-profit company.

Frequently Asked Questions

1. Can a Section 8 company carry out commercial activities?

Yes, but with conditions. A Section 8 company can earn revenue through commercial activities (e.g., selling publications, conducting paid workshops, running a social enterprise) provided the income is applied towards its stated objects. The company cannot distribute profits to members. The commercial activity should be incidental to the charitable objects, not the primary purpose.

2. Is GST registration required for a Section 8 company?

GST registration is required if the company provides taxable supplies (goods or services) and the aggregate turnover exceeds Rs 20 lakh (Rs 10 lakh for special category states). Pure donations received without any quid pro quo are not “supply” under GST and do not count towards the turnover threshold. However, fees charged for training programmes, workshops, or services are taxable supplies.

3. Can directors of a Section 8 company receive remuneration?

Yes. Directors can receive reasonable remuneration for services rendered, as approved by the Board and in compliance with Section 197 of the Companies Act. However, the remuneration must be at arm’s length and not a disguised distribution of profits. Excessive remuneration can attract scrutiny from the Income Tax Department (threatening 12A status) and the Regional Director (threatening the Section 8 licence).

4. What is the difference between 12A and 80G?

12A benefits the Section 8 company itself — it exempts the company’s income from income tax. 80G benefits the donors — it allows donors to claim a tax deduction for donations made to the company. Both registrations are independent and must be applied for separately. A Section 8 company can have 12A without 80G, but having both is essential for effective fundraising.

5. Can a Section 8 company be converted to a for-profit company?

Not directly. A Section 8 company cannot voluntarily convert to a for-profit company while the licence is in force. The Central Government can revoke the licence if the company violates its conditions, after which the company can potentially restructure. However, this is an uncommon and legally complex process. If you anticipate a for-profit structure in the future, do not register as a Section 8 company.

6. Is statutory audit mandatory for a Section 8 company?

Yes. Like all companies under the Companies Act, a Section 8 company must appoint a statutory auditor and get its financial statements audited annually. Additionally, if the company has 12A registration, the audit report must specifically certify compliance with the conditions of 12A registration.

7. How is a Section 8 company different from a Section 25 company?

Section 25 was the equivalent provision under the old Companies Act, 1956. Section 8 of the Companies Act, 2013 replaced Section 25. All existing Section 25 companies are deemed to be Section 8 companies. The substantive provisions are similar, with enhanced governance requirements under the 2013 Act.

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