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In India, a Section 8 Company is a special type of company incorporated with the objective of promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other such purpose. This form of company is governed by the Companies Act, 2013 in India. Section 8 Companies enjoy several benefits, including tax exemptions, making them a popular choice for non-profit organizations. This article provides a detailed guide on Section 8 Company Registration in India, including information on 80G/12A, FCRA Registration, Niti Aayog Registration, and CSR Registration.
A Section 8 Company is essentially a non-profit organization established for charitable purposes. Unlike other companies, it does not distribute its profits to its members but reinvests them in furthering its objectives. These companies enjoy special privileges and exemptions under Indian law.
The first step is to obtain DSC for the proposed directors of the company. The DSC is essential for filing electronic forms on the MCA portal.
Next, apply for DIN for the proposed directors. DIN is a unique identification number allotted to individuals who wish to be appointed as directors.
Apply for name approval through the RUN (Reserve Unique Name) facility on the MCA portal. The name should be unique and indicative of the company’s objectives.
Draft the MOA and AOA of the company. The MOA should clearly state the charitable objectives of the company, while the AOA contains the rules and regulations for the management of the company.
File Form INC-12 with the Registrar of Companies (RoC) along with the following documents:
Draft MOA and AOA
Declaration by professionals in Form INC-14
Declaration by directors in Form INC-15
Estimated income and expenditure for the next three years
Upon verification, the RoC will issue a license under Section 8 of the Companies Act, 2013.
After receiving the license, file the incorporation forms (SPICe) along with the necessary documents to obtain the Certificate of Incorporation.
To avail tax exemptions, Section 8 Companies must obtain 80G 12A registrations from the Income Tax Department.
80G registration allows donors to avail tax deductions on donations made to the Section 8 Company. To obtain 80G registration, file Form 10G along with the following documents:
MOA and AOA of the company
Registration certificate
PAN of the company
Audited financial statements and IT returns of the last three years
12A registration exempts the company from paying income tax on its surplus income. To apply for 12A registration, file Form 10A along with:
MOA and AOA of the company
Registration certificate
PAN of the company
Audited financial statements and IT returns of the last three years
For Section 8 Companies seeking to receive foreign donations, FCRA registration is mandatory. This ensures that foreign contributions are used for legitimate purposes.
Section 8 Companies can have NITI Aayog Registration to be eligible for government grants and schemes.
Section 8 Companies can receive funds from corporate entities under the Corporate Social Responsibility (CSR) initiative as per the Companies Act, 2013. For this, the company must comply with certain eligibility criteria and registration requirements.
Registering a Section 8 Company in India is a strategic move for non-profit organizations aiming to create a significant social impact. With the benefits of tax exemptions, legal status, and higher credibility, a Section 8 Company stands out as a robust structure for charitable entities. Additionally, obtaining 80G/12A, FCRA, NITI Aayog, and CSR registrations further enhances the company's ability to receive funding and support from various sources, ensuring sustainable operations and growth. By following the outlined steps and understanding the associated benefits, you can execute the process of Section 8 Company registration and position your organization for success in achieving its charitable objectives.
Author: Compliance Calendar is a leading legal, tax and compliance firm in India.
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