A Section 8 Company is an entity registered under the Companies Act, 2013 for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any such other objective. Profits and income earned by a Section 8 company must be applied exclusively towards promoting its statutory objects, and the payment of any dividend to its members is strictly prohibited. Compared to traditional public charitable trusts and societies, Section 8 companies enjoy superior institutional credibility, transparent corporate governance, and nationwide operational jurisdiction.
Key Statutory Takeaways
- Section 8 companies require a statutory Section 8 License issued by the Central Government (CRC / MCA) prior to incorporation.
- Enjoy complete exemption from using 'Limited' or 'Private Limited' suffixes in their legal registered corporate name.
- Registration under Section 12A / 12AB of the Income-tax Act grants 100% tax exemption on donations and surplus income.
- Registration under Section 80G allows donors to claim 50% tax deduction on financial contributions made to the organization.
- Eligible to receive Corporate Social Responsibility (CSR) grant funding from corporate enterprises under Section 135 upon filing Form CSR-1.
Philanthropists, non-profit founders, and corporate institutions seeking to create transparent social impact organizations choose the Section 8 corporate vehicle for its governance integrity. Our Non-Profit Incorporation Desk assists NGOs with MCA licensing, 12A/80G registrations, and CSR-1 certifications.
1. What is a Section 8 Company? (Vs Trust & Society)
Unlike a registered Trust (governed by the Indian Trusts Act, 1882) or a Society (governed by the Societies Registration Act, 1860), a Section 8 Company is governed by the national Companies Act, 2013. It offers perpetual succession, limited liability protection to promoters, and nationwide operational validity without requiring separate state-level permissions.
Comparing Non-Profit Governance with Commercial Corporate Entities? →
Read our definitive comparison of Private Limited Company and LLP governance structures for commercial enterprises.
Incorporate Your Non-Profit Section 8 Company with 12A & 80G
Our non-profit legal team handles name reservation, MCA license drafting, SPICe+ incorporation, and simultaneous Form 10A filing for tax exemption.
Incorporate Section 8 CompanyFrequently Asked Questions
Can directors of a Section 8 Company draw a salary?
Directors cannot draw dividends or share profits. However, reasonable remuneration or reimbursement of out-of-pocket expenses for actual professional services rendered can be paid if permitted by the company's Articles of Association and approved by the Central Government.
What is the validity period of provisional 12A and 80G registration?
Under the new re-registration scheme, provisional 12A and 80G registrations granted via Form 10A are valid for 3 years. The organization must apply for final regular registration in Form 10AB at least 6 months prior to expiry or within 6 months of commencing activities.
Can a Section 8 company receive foreign donations under FCRA?
Yes. However, foreign contributions cannot be accepted immediately upon incorporation. The Section 8 company must first operate for a minimum of 3 years and spend at least ₹15 Lakhs on its core objectives before applying for an FCRA registration certificate from the Ministry of Home Affairs (MHA).
This publication provides general educational information and analysis. It does not constitute formal tax or legal counsel. For specific case evaluation, consultation with an authorized tax professional is recommended.
