A Section 8 company is one of the most credible and structured forms of a non-governmental organization (NGO) or non-profit entity in India. It operates under the Companies Act, 2013, and is created with the primary objective of promoting charitable, social, educational, or environmental causes. Many entrepreneurs and social workers in India are choosing this form of organization due to its transparency and legal benefits. However, a common question arises — Who is eligible for Section 8 company registration?
A Section 8 company is defined under Section 8 of the Companies Act, 2013, which allows the formation of a company with charitable objectives. The income and profits generated by such a company are used solely for promoting its objectives and not distributed among its members. These objectives may include:
Promoting commerce, art, science, sports, education, research, or social welfare
Protecting the environment
Promoting charity or religion
Uplifting society through sustainable development programs
To operate legally and gain credibility, such an organization must go through the Section 8 company registration process with the Ministry of Corporate Affairs (MCA).
Eligibility Criteria for Section 8 Company Registration
Not every individual or entity can form a Section 8 company. The eligibility criteria for Section 8 company registration in India are clearly defined under the Companies Act. Below are the key requirements:
Objective of the Organization
The primary eligibility criterion for Section 8 company registration is that the company must be formed for charitable or not-for-profit purposes. The objectives must focus on social welfare, environmental protection, promotion of education, art, culture, science, or sports. The company must not have any profit motive.
Minimum Number of Members
For a Private Limited Section 8 Company, at least 2 members and 2 directors are required.
For a Public Limited Section 8 Company, at least 7 members and 3 directors are needed.
The same individuals can act as both directors and members during the Section 8 company registration process.
Residency Requirement
At least one director must be a resident of India. This means the person should have stayed in India for at least 182 days during the previous financial year.
No Minimum Capital Requirement
Unlike other types of companies, there is no minimum capital requirement for Section 8 company registration. The funds required can be introduced as per the operational needs of the company.
Utilization of Profits
A Section 8 company cannot distribute its profits to members or shareholders. The profits must be utilized strictly for the company’s objectives, which is an essential condition for Section 8 company registration approval.
Legal Approval from the Central Government
Before incorporation, the promoters must obtain a license from the Central Government under Section 8 of the Companies Act. This approval is mandatory for Section 8 company registration and ensures that the entity is genuinely working for non-profit objectives.
Documents Required for Section 8 Company Registration
To apply for Section 8 company registration, the following documents are essential:
PAN card and Aadhaar card of all directors
Passport-size photographs
Proof of residence (electricity bill, bank statement, etc.)
Proof of registered office (rent agreement or ownership proof)
Digital Signature Certificate (DSC) of proposed directors
Memorandum of Association (MOA) and Articles of Association (AOA)
Declaration by directors stating the non-profit objectives
Proper documentation ensures smooth approval during Section 8 company registration with the Ministry of Corporate Affairs (MCA).
Step-by-Step Process of Section 8 Company Registration
Here is a simple breakdown of the Section 8 company registration process in India:
Obtain Digital Signature Certificate (DSC):
Each director must have a valid DSC to sign and submit electronic documents online.
Apply for Director Identification Number (DIN):
Every director involved in the company must have a DIN, which can be applied for through the SPICe+ form.
Name Approval:
Submit an application for name reservation via the RUN (Reserve Unique Name) service on the MCA portal. The name must include words such as Foundation, Association, Federation, Forum, or Council to indicate its non-profit nature.
Filing of SPICe+ Form:
The SPICe+ form combines the application for incorporation, DIN, PAN, and TAN. This form must be submitted with the necessary attachments and declarations.
Approval and License:
Once all documents are verified, the Registrar of Companies (ROC) issues a license under Section 8 along with the Certificate of Incorporation. After this, the company is officially recognized as a non-profit entity.
Benefits of Section 8 Company Registration
Registering as a Section 8 company offers numerous advantages:
Legal Recognition: A Section 8 company is registered under the Companies Act, which provides it with strong legal standing.
Tax Exemptions: After successful Section 8 company registration, the company can apply for 12A and 80G registration to enjoy tax benefits.
Credibility: Due to strict compliance and transparency, Section 8 companies are highly trusted by donors and government agencies.
CSR Funding: Corporates prefer donating to Section 8 companies to fulfill their CSR obligations.
No Minimum Capital: Easy and flexible financial structure allows more individuals to start non-profit ventures.
Who Can Apply for Section 8 Company Registration?
Any individual, group, or association of persons with genuine charitable intentions can apply for Section 8 company registration. Indian citizens as well as foreign nationals residing in India are eligible, provided at least one Indian resident is part of the board.
Entrepreneurs, philanthropists, educationalists, social activists, and professionals aiming to create social impact can all start a Section 8 company. It is a perfect structure for those who wish to contribute to society while maintaining legal credibility and governance standards.
Conclusion
So, who is eligible for Section 8 company registration?
Any person or group of persons with a clear, charitable objective and no intention of profit-making can apply for it. The Section 8 company registration process ensures that the organization operates legally, transparently, and efficiently while achieving its social goals.
By completing Section 8 company registration, you not only gain legal recognition but also open doors to CSR funding, tax exemptions, and nationwide credibility. If your mission is to create social change and work for public welfare, Section 8 company registration is the most suitable and trusted structure to begin your journey.