A Section 8 Company is a non-profit organization registered under Section 8 of the Companies Act, 2013, formed exclusively for promoting charitable objectives such as education, social welfare, science, art, religion, environmental protection, or other socially beneficial purposes. Unlike other business entities, the primary aim of a Section 8 Company is not profit generation but social impact.

In simpler terms, it’s a company that operates for not-for-profit objectives, reinvesting any profits earned into achieving its mission rather than distributing them to its members.

 

Documents Required for Section 8 Company Registration

1. To register a Section 8 Company in India, the following documents and details are required:
2. Proposed Name of the Company
3. Main Object Clause (clearly describing the purpose and mission)
4. Registered Office Address Proof (not older than 2 months) – Telephone Bill / Electricity Bill
5. Company Contact Details – Phone Number and Email ID
6. Authorized and Paid-up Share Capital
7. Proposed Bank Name for current account opening

 

Details and Documents of Directors/Shareholders:

1. Passport Size Color Photograph of each director
2. Contact Details – Phone Number and Email ID of all directors
3. Self-Attested KYC Documents – PAN Card and Aadhaar Card of all directors
4. Recent Address Proof (Bank Statement / Telephone / Mobile / Electricity Bill in subscriber’s name – not older than 2 months)
5. Digital Signature Certificate (DSC) of all shareholders and directors

 

Advantages of Registering a Section 8 Company

1. Tax Benefits
2. Exemption from income tax on surplus income
3. Eligible for tax deductions under Section 80G of the Income Tax Act
4. Name Flexibility
5. Exempt from using “Limited” or “Private Limited”
6. Can use suffixes like Foundation, Association, Society, etc.
7. Enhanced Credibility
8. Trusted by donors, government bodies, and the public due to its legal structure and transparency
9. No Stamp Duty
10. Exemption from stamp duty on the Memorandum of Association (MOA) and Articles of Association (AOA)
11. Eligibility for Foreign Contributions
12. Can receive foreign donations if registered under the Foreign Contribution Regulation Act (FCRA)

 

Disadvantages of Section 8 Company

No Profit Distribution
Dividends cannot be distributed to members or shareholders. All earnings must be reinvested into the organization’s mission.

1. Profit is Not the Main Objective
   • Profit cannot be used for personal gain or shared among directors or shareholders.
2. Restriction on Member Roles
   • Members of the company cannot be appointed as officers or draw financial benefits from the company.
3. Amendment Restrictions
   • The MOA and AOA cannot be altered freely. Any change requires approval from the Central Government.