Section 8 Company (NGO) Registration in India: Complete Guide (2026)
Quick Answer
A Section 8 Company is a company registered under Section 8 of the Companies Act, 2013 for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment, or any other useful object — provided it intends to apply its profits (if any) or other income in promoting its objects and prohibits the payment of any dividend to its members. Section 8 is the preferred structure for NGOs, social enterprises, and charitable organisations that want corporate governance, credibility, and perpetual succession. Registration takes 15-25 working days and costs Rs 14,999 at Virtual Auditor (all-inclusive: government fees, DSC, DIN, MOA/AOA drafting, ROC filing).
Definition — Section 8 Company: Under Section 8(1) of the Companies Act, 2013, the Central Government may allow a person or association of persons to be registered as a limited company without the addition of the words “Limited” or “Private Limited” to its name, if the company is formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other useful object, and intends to apply its profits or other income in promoting its objects, and prohibits the payment of any dividend to its members.
Equivalent under old law: Section 25 of the Companies Act, 1956. All Section 25 companies were deemed to be Section 8 companies after the 2013 Act came into force.
Section 8 Company vs Trust vs Society: Which NGO Structure?
Section 8 Company
Governing law: Companies Act, 2013 (central legislation). Regulator: Registrar of Companies (ROC) under MCA. Minimum members: 2 directors and 2 members (for Pvt Ltd form) or 3 directors and 7 members (for public form). Governance: Board of Directors, MOA/AOA, AGM, statutory audit — same corporate governance as any company. Credibility: Highest among NGO structures — regulated by MCA, subject to statutory audit, annual filings are public. Dissolution: Only through NCLT or MCA approval — assets cannot be distributed to members, must be transferred to another Section 8 company or entity with similar objects.
Trust
Governing law: Indian Trusts Act, 1882 (public trusts governed by state-specific legislation — e.g., Bombay Public Trusts Act, 1950). Regulator: Charity Commissioner (state-level). Minimum members: 2 trustees. Governance: Trust Deed. Less formal governance — no mandatory audit below certain thresholds in some states. Credibility: Moderate — no central registry, limited public disclosure. Dissolution: Governed by Trust Deed — generally, a trust is irrevocable once created.
Society
Governing law: Societies Registration Act, 1860 (state-specific amendments apply). Regulator: Registrar of Societies (state-level). Minimum members: 7 members. Governance: Memorandum and Rules & Regulations. Democratic structure — members vote on key decisions. Credibility: Moderate — registered at state level, varying disclosure requirements. Dissolution: By resolution of members or by order of the Registrar.
Our recommendation: Choose a Section 8 Company if your NGO plans to receive CSR funds (Companies Act Section 135 requires CSR contributions to entities registered under Schedule VII), apply for FCRA registration, engage with institutional donors (who prefer audited entities with public filings), or scale operations across states (central registration, no state-by-state re-registration).
Eligibility and Objects Permitted Under Section 8
Section 8(1) of the Companies Act, 2013 permits registration for the following objects:
- Promotion of commerce, art, science, sports, education, research, social welfare
- Religion, charity, protection of environment
- Any other useful object
The key conditions under Section 8(1)(a) and 8(1)(b):
- The company intends to apply its profits, if any, or other income in promoting its objects
- The company prohibits the payment of any dividend to its members
If the Central Government is satisfied that the objects and conditions are met, it issues a licence under Section 8(1) allowing the company to be registered without “Limited” or “Private Limited” in its name. The company can use designations like “Foundation,” “Forum,” “Association,” “Federation,” “Council,” or “Chamber” instead.
Step-by-Step Section 8 Company Registration Process
Step 1: Obtain DSC and DIN for Proposed Directors
Minimum 2 directors required (one must be an Indian resident under Section 149(3)). Apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN) through the SPICe+ form. Documents required: PAN, Aadhaar, passport-size photo, email, mobile number of each proposed director.
Step 2: Apply for Name Reservation
Apply for name through RUN (Reserve Unique Name) or Part A of SPICe+. The name should reflect the charitable/social object — e.g., “[Object] Foundation” or “[Cause] Association.” The name must not be identical or similar to existing companies or trademarks. MCA may reject names that do not align with the declared objects.
Step 3: Draft MOA and AOA
The MOA of a Section 8 company must clearly state:
- The objects (main, ancillary, and other objects) aligned with Section 8(1)
- A clause prohibiting payment of dividends to members
- A clause that upon winding up, surplus assets shall be transferred to another Section 8 company or entity with similar objects — not distributed to members
- A clause that the income and property of the company shall be applied solely towards the promotion of its objects
The AOA governs internal management — board meetings, member meetings, appointment/removal of directors, powers of the board, accounts and audit. At Virtual Auditor, we draft MOA and AOA specifically for Section 8 companies — ensuring the objects clause, dividend prohibition, and asset transfer clauses are legally precise.
Step 4: File INC-12 (Application for Licence Under Section 8)
This is the critical step unique to Section 8 registration. File Form INC-12 with the ROC along with:
- Draft MOA and AOA
- Declaration by each promoter in Form INC-14 (by a practising CA/CS/CWA certifying that the MOA/AOA comply with Section 8)
- Declaration in Form INC-15 by each director/promoter that the company will comply with Section 8 requirements
- Estimated annual income and expenditure for the next 3 years
- Brief description of the work proposed to be done
The ROC processes INC-12 and, upon satisfaction, directs publication of the application in Form INC-13 in a newspaper (one English and one vernacular). After 30 days from publication (to allow objections), the ROC grants the licence.
Step 5: File SPICe+ (INC-32) for Incorporation
After obtaining the Section 8 licence, file SPICe+ for actual incorporation. The process is the same as a standard Pvt Ltd — MOA/AOA, director details, registered office, AGILE-PRO (PAN, TAN, GST, EPFO, ESIC). The Certificate of Incorporation is issued with CIN (Company Identification Number).
Step 6: Post-Incorporation Steps
Identical to the standard Pvt Ltd post-incorporation process: open bank account, hold first board meeting within 30 days, appoint first auditor under Section 139(6), maintain statutory registers, file INC-20A.
Practitioner Insight — CA V. Viswanathan, IBBI/RV/03/2019/12333
The INC-12 application is where most Section 8 registrations get delayed. The ROC scrutinises the objects clause carefully — vague objects like “welfare of society” or “helping the needy” are often rejected. We draft specific, measurable objects — for example, “promoting education by establishing and maintaining schools in rural Tamil Nadu for children from economically weaker sections” rather than “promoting education.” The projected income and expenditure statement must be realistic and demonstrate financial viability. At Virtual Auditor, we have a 98% first-attempt approval rate for Section 8 applications because we invest 3-4 hours in drafting the objects clause and financial projections before filing INC-12.
Tax Exemptions: 12AB and 80G Registration
Registration Under Section 12AB (Formerly 12AA)
To claim exemption from income tax on its income, a Section 8 company must register under Section 12AB of the Income Tax Act, 1961. Prior to 1 April 2021, this was Section 12AA; the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 replaced 12AA with 12AB.
Process: Apply in Form 10A (for provisional registration) or Form 10AB (for regular registration) to the Principal Commissioner or Commissioner of Income Tax. Provisional registration is valid for 3 years; within 6 months before expiry (or within 6 months of commencing activities), apply for regular registration which is valid for 5 years and must be renewed.
Effect: Once registered under Section 12AB, the income of the Section 8 company is exempt from tax to the extent it is applied to charitable purposes. If income is accumulated beyond 15% of total income, it must be applied within 5 years under Section 11(2) with specific forms (Form 10).
Application requirement under Section 11(1): At least 85% of the income must be applied to charitable objects during the financial year. Up to 15% can be accumulated without any condition. Accumulation beyond 15% requires filing Form 10 specifying the purpose and period of accumulation.
Registration Under Section 80G
Section 80G registration allows donors to claim deduction from their taxable income when they donate to the Section 8 company. This is critical for fundraising — institutional donors, corporates (for CSR), and individual donors prefer donating to 80G-registered entities because they get tax benefit.
Process: Apply in Form 10A (provisional) or Form 10AB (regular) to the Commissioner of Income Tax. The process runs in parallel with or after 12AB registration.
Deduction available to donors: 50% of the donation amount is deductible from the donor’s total income (for most Section 8 companies). Some specified funds/institutions get 100% deduction, but Section 8 companies generally fall under the 50% category unless specifically notified.
Annual obligation: The Section 8 company must issue a donation receipt with its 80G registration number, PAN, and the donor’s details. It must file Form 10BD (Statement of Donations) and issue Form 10BE (Certificate of Donation) to each donor annually.
CSR Eligibility Under Section 135
Under Section 135 of the Companies Act, 2013, companies meeting specified net worth, turnover, or net profit thresholds must spend 2% of average net profits on CSR activities listed in Schedule VII. CSR contributions can be made to:
- Section 8 companies registered under 12AB
- Entities established by the company itself or in collaboration with other companies
- Entities established by the Central/State Government
Registration on the CSR portal (CSR-1 form) is mandatory for entities receiving CSR funds. This registration requires 12AB registration as a prerequisite.
FCRA Registration for Receiving Foreign Donations
If the Section 8 company intends to receive donations or contributions from foreign sources, it must register under the Foreign Contribution (Regulation) Act, 2010 (FCRA). Key requirements:
- Eligibility: The entity must have been in existence for at least 3 years and must have spent at least Rs 15 lakh on its objects during the last 3 financial years (or Rs 10 lakh in each of the last 3 years)
- Application: Form FC-3A filed online on the FCRA portal with the Ministry of Home Affairs
- Designated bank account: All foreign contributions must be received in a designated FCRA account at the State Bank of India, Main Branch, New Delhi (as per 2020 amendment)
- Utilisation limit: Administrative expenses cannot exceed 20% of the foreign contribution received
- Annual return: Form FC-4 must be filed by 31 December each year
Prior to completing 3 years of existence, the entity can apply for prior permission under Section 11(2) of FCRA to receive a specific foreign donation for a specific project.
Annual Compliance for Section 8 Companies
Annual Compliance Calendar
| Compliance | Due Date | Governing Law |
|---|---|---|
| Statutory Audit | Before AGM | Section 139, Companies Act |
| AGM | Within 6 months of FY end | Section 96, Companies Act |
| AOC-4 (Financial Statements) | Within 30 days of AGM | Section 137, Companies Act |
| MGT-7 (Annual Return) | Within 60 days of AGM | Section 92, Companies Act |
| ITR-6 / ITR-7 | 31 October (if audit applicable) | Section 139(1), IT Act |
| Form 10 (Accumulation) | Before filing ITR | Section 11(2), IT Act |
| Form 10BD (Donation Statement) | 31 May | Section 80G, IT Act |
| Form 10BE (Donation Certificate) | 31 May | Rule 18AB, IT Rules |
| DIR-3 KYC (Directors) | 30 September | Rule 12A, Companies Rules |
| FCRA Annual Return (FC-4) | 31 December | Section 18, FCRA 2010 |
| CSR-1 Registration Renewal | As applicable | CSR Rules, Companies Act |
Restrictions on Section 8 Companies
Section 8 companies operate under stricter restrictions than ordinary companies:
- No dividends: Section 8(1)(b) absolutely prohibits payment of any dividend to members. All surplus must be ploughed back into the objects.
- No profit distribution: No remuneration to directors except sitting fees for board meetings (Section 8(1)(a)). However, directors can be paid reasonable remuneration for professional services rendered to the company (not in their capacity as directors).
- Asset lock: On winding up, surplus assets must be transferred to another Section 8 company or similar entity — not distributed to members.
- Alteration of MOA: Any alteration to the MOA (objects, name) requires prior approval of the Central Government under Section 8(4).
- Revocation risk: If the company contravenes Section 8 conditions (distributes profits, alters objects without approval, conducts activities contrary to its objects), the Central Government can revoke the licence under Section 8(6). Penalty: Rs 10 lakh to Rs 1 crore on the company, and Rs 25,000 to Rs 25 lakh on each defaulting officer, and imprisonment up to 3 years.
Virtual Auditor Section 8 Registration Packages
- Section 8 Registration Only: Rs 14,999 — INC-12 licence application, SPICe+ incorporation, MOA/AOA drafting, DSC, DIN, government fees
- Section 8 + 12AB + 80G: Rs 24,999 — Registration + provisional 12AB + provisional 80G applications
- Section 8 Complete (with FCRA): Rs 44,999 — Registration + 12AB + 80G + FCRA application (post 3-year eligibility assistance)
- Annual Compliance Retainer: Rs 19,999/year — statutory audit, ROC filings, ITR, Form 10BD/10BE, FCRA return
View full pricing | Book a free consultation
Frequently Asked Questions
Can a Section 8 company generate revenue from its activities?
Yes. A Section 8 company can charge fees for services (e.g., school fees for an educational institution, hospital charges for a charitable hospital, training programme fees). The key condition is that all profits and income must be applied towards the company’s objects — no dividend or profit distribution to members is permitted. Many successful Section 8 companies have significant revenue and even surplus — the distinction is the application of surplus, not the absence of it.
Can directors of a Section 8 company receive salary?
Directors cannot receive managerial remuneration in their capacity as directors. However, if a director renders professional services to the company (e.g., as a consultant, teacher, or administrator), they can receive reasonable remuneration for those services. The remuneration must be approved by the Board and disclosed in the financial statements. Sitting fees for attending board meetings are permitted under Section 197(5).
What is the difference between 12AA and 12AB registration?
Section 12AA was the provision for registration of charitable trusts and institutions under the Income Tax Act. The Taxation and Other Laws Act, 2020 replaced Section 12AA with Section 12AB effective 1 April 2021. All existing 12AA registrations were required to be renewed under 12AB. New applications are filed under Section 12AB. The process is similar — provisional registration via Form 10A (valid for 3 years), followed by regular registration via Form 10AB (valid for 5 years, renewable).
Can a Section 8 company be converted to a regular Pvt Ltd?
Conversion of a Section 8 company to a regular for-profit company is extremely difficult and requires Central Government approval under Section 8(4). The Government will consider the objects, the reasons for conversion, and the treatment of accumulated assets. In practice, such conversions are rarely approved because Section 8 assets were contributed/donated for charitable purposes and converting them to a for-profit entity would defeat the donors’ intent. It is better to incorporate a separate Pvt Ltd if you need a for-profit entity.
Is GST registration required for a Section 8 company?
GST registration is required if the Section 8 company’s aggregate turnover from taxable supplies exceeds Rs 20 lakh (Rs 10 lakh for special category states) under Section 22 of the CGST Act. Pure donations and grants without consideration are not “supply” and do not count towards turnover. However, if the company charges fees, sells publications, or provides any service for consideration, those amounts are taxable supplies. Many Section 8 companies engaged in education are exempt under Entry 66 of the Mega Exemption Notification (No. 12/2017-Central Tax (Rate)) for services provided by educational institutions to students.
How long does Section 8 registration take?
The entire process takes 15-25 working days: DSC/DIN (2-3 days), INC-12 application and newspaper publication (7-14 days including the mandatory 30-day objection period which the ROC may process concurrently), SPICe+ filing and Certificate of Incorporation (5-7 days after licence grant). The newspaper publication and 30-day waiting period is the main time factor. At Virtual Auditor, we initiate the newspaper publication immediately upon INC-12 filing to minimise delays.
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