The primary purpose of a Section 8 Company is to promote charitable objectives rather than profit generation. Any income or profits are reinvested in furthering the objectives, rather than distributed as dividends.

             Members’ liability is limited to their shareholding or guarantee amount, offering protection of personal assets from company liabilities.

             The company enjoys independent legal status, enabling it to own property, enter into contracts, and sue or be sued.

             Unlike other company types, Section 8 Companies do not have a minimum capital requirement.

             The existence of the company remains unaffected by changes in membership or leadership.

             Section 8 Companies are eligible for various tax exemptions under the Income Tax Act, making them an ideal structure for non-profit ventures.

          Section 8 Companies have greater credibility than NGOs or Societies due to the strict regulatory framework, which enhances trust among donors and stakeholders.

          These companies can avail of various tax exemptions and rebates, making them tax-efficient for non-profit purposes.

           The company can operate independently of its members, facilitating better governance and protection of the organization’s assets.

           Section 8 Companies are ideal for organizations that want to ensure all profits are reinvested into the charitable objectives, rather than distributed to shareholders.

           Despite being non-profit, Section 8 Companies have greater operational flexibility compared to Trusts and Societies, allowing them to engage in a wide range of activities.

           Select a name that reflects the charitable objectives and complies with the guidelines provided by the Ministry of Corporate Affairs (MCA). Note that “Private Limited” or “Limited” cannot be part of the name.

           Acquire Digital Signature Certificates for all proposed directors for electronic submission of documents.

           Obtain DIN for the proposed directors through the MCA portal.

           Draft the Memorandum of Association (MOA) and Articles of Association (AOA) clearly specifying the charitable objectives and operational rules of the company.

Submit the incorporation application with the ROC, including MOA, AOA, DSCs, DINs, and the relevant forms (e.g., INC-12 for Section 8 Companies).

Upon approval, a License under Section 8 is granted, followed by the Certificate of Incorporation.

           Apply for a PAN card in the company’s name for tax filing purposes.

           Open a bank account in the company’s name. Typically, banks require the Certificate of Incorporation, PAN card, and proof of registered address.

           To avail of tax benefits, apply for Section 12A and Section 80G registration under the Income Tax Act, allowing the company to receive tax-deductible donations and exemptions.

           Register for GST if the company’s turnover exceeds the prescribed limit or engages in inter-state trade. Voluntary registration is also possible for availing input tax credits.

FCRA Registration : Required for receiving foreign donations.

MSME Registration: For availing government benefits for small enterprises.

Trade License: Required for specific business activities issued by the local municipal authority.

            Protect the company’s name, logo, or branding by registering a trademark.

            Register as an implementing agency to receive Corporate Social Responsibility (CSR) funds from corporate donors.