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Notice: File your annual accounts (AOC-4) before 29th October. Talk to our expert

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Get ₹1000 cashback* upon your Section 8 registration with our banking partners offer.T&C*

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Are you still confused?

Our experts can help you navigate the registration process and choose the right structure, saving you time and money.

Right planfor your NGO

Vakilsearch's registration experts guide you through the entire process until you obtain the Section 8 registration.

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₹3,999

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Note:Government fees for NGO registration are extra and it varies from state to state.  T&C

benefits of section 8 company

Section 8 Company Registration FAQ's

No, Section 8 companies are generally exempt from paying income tax on their income derived from activities aligned with their objectives, such as social welfare, education, or research. This exemption is granted underSection 12AA of the Income Tax Act, 1961.
However, there are few exceptions:
  • Income from commercial activities: If a Section 8 company generates income from activities unrelated to its charitable objectives, such as running a commercial restaurant, that income will be subject to regular income tax.
  • Excess income not applied for objectivesAny income earned beyond what's reasonably needed for achieving the company's objectives is also subject to tax.
  • There are no minimum requirements in terms of capital or shareholding for starting a Section 8 company. However, it must have:
  • At least two promoters/subscribers: These individuals will initiate the incorporation process and become the initial directors.
  • A well-defined objective:The objective should be explicitly mentioned in the company's Memorandum of Association (MoA) and aligned with Section 8 purposes like education, environment, or promoting art and culture.
  • Limited liability protection:Shareholders and directors have limited liability, meaning their personal assets are not at risk for the company's debts.
  • Whether a Section 8 company needs GST registration depends on its annual turnover and activities. If the company's turnover exceeds the prescribed threshold (currently 40 lakhs in most states), it needs to register for GST. Additionally, even if the turnover is below the threshold, registration might be necessary if the company:
  • Makes interstate supplies of goods or services.
  • Imports goods or services.
  • Acts as a supplier of goods or services to a GST-registered business.
  • Converting an existing company into a Section 8 Company involves the alteration of the company's Memorandum and Articles of Association and obtaining approval from the Registrar of Companies (RoC). You will need to meet the eligibility criteria, prepare the necessary documents, and follow the prescribed procedure as per the Companies Act, 2013.
    A Section 8 Company can be either a private or a public company, depending on its structure and the number of members. It follows the same classification criteria as other companies under the Companies Act, 2013.
    You can check the registration status of a Section 8 Company by searching the Ministry of Corporate Affairs (MCA) portal in India. The MCA provides online access to information about registered companies, including Section 8 Companies.
    There is no maximum limit for the number of members in a Section 8 Company. The company can have any number of members as required for achieving its objectives.
    Alternatives for starting a non-profit organization (NGO) in India include forming a Trust, a Society, or a Section 8 Company. The choice depends on the specific goals, governance structure, and legal requirements of the organization.
    Yes, a registered office address is required for starting a Section 8 Company in India. You must provide a physical location where official communications can be received.
    No, physical presence is not mandatory for incorporating a Section 8 Company. The incorporation process can be completed online or through the assistance of legal professionals.

    Recent Updates

    As on 1 April, 2021, per CBDT's notification number 19/2021, issued 26 March 2021, the government included explicit clauses in the Finance Act of 2020. Some of the significant changes are provided below.

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    Authors

    Written by Nithya, Reviewed by Sushmitha Pawar. Last updated on May 28 2024, 11:33 AM

    Sushmitha Pawar BA.LLB (Hons), a senior legal expert specialises in NGO registration, NGO compliance, FCRA, trust, society, and fundraising.

    Nithya Ramani Iyer, a criminologist and writer, serves as the SME and manages communications at Vakilsearch. Drawing from her experience at Seasearch Intelligence and Legal domains, she enriches our content with insightful perspectives.