Section 8 Company

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Overview

A Section 8 Company is a legally recognized not-for-profit entity incorporated under the Companies Act, 2013 in India. It is established with the primary aim of promoting activities that serve the public good—such as education, science, art, culture, sports, social welfare, environmental protection, research, and charitable causes. While it functions within the framework of a limited company, its core principle is the reinvestment of income into its objectives. Profits, if any, are not distributed to members but are fully directed toward furthering the organization’s mission and impact.

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Minimum Requirements

New & Unique Name

In view of name guidelines under the Companies Act, 2013, you must have a new and unique name. The name of a Section 8 Company should end with the words “Foundation,” “Association,” “Society,” “Council,” “Club,” “Charity,” “Institute,” “Organization,” “Federation,” “Chamber of Commerce,” or “Trust.”

Minimum Seven Persons

At least 2 person required to act as the initial shareholder & director. Atleast one of the director must be an Indian Resident.

Registered Address

Company Premises can either be owned or rented.

Capital Requirement

Sec.8 company must not have any share capital, and any surplus or profits must be utilized for promoting the objectives of the company.

Advantages

Separate Legal Entity

A Section 8 Company possesses a distinct legal identity, independent of its members. This enables the company to own property, incur liabilities, and enter into contracts in its own name, separate from the individuals associated with it.

Limited Liability of Members

Members of a Section 8 Company enjoy limited liability, meaning they are responsible only up to the amount they have agreed to contribute towards the company’s assets in the event of winding up.

Perpetual Succession

A Section 8 Company enjoys perpetual succession, which means its existence is not affected by any change in its members or directors—it continues to operate as a legal entity uninterrupted.

Fund Raising

A Section 8 Company is permitted to raise funds through contributions from its members, donations from the general public, and support from various other sources to finance its charitable and social initiatives.

Professional Management

Section 8 Companies are structured with a formal management system that includes directors, shareholders, and auditors. This framework promotes transparency, accountability, and efficient professional management right from the outset.

Tax Benefits

Section 8 Companies are entitled to notable tax exemptions under the Income Tax Act, 1961, specifically Sections 12AA and 80G. These provisions enhance the financial viability of non-profit operations by offering tax relief to both the organization and its donors.

Charitable and Social Causes

Section 8 Companies are established with the primary objective of advancing charitable and social initiatives. They serve as effective platforms for implementing programs in areas such as education, healthcare, environmental sustainability, and other community-focused causes.

Recognition and Credibility

A Section 8 Company is registered under the Companies Act, which provides it with recognition and credibility in the eyes of the government, donors, and other stakeholders.

Your Takeouts

DIN for 2 Directors

DSC for 2 Directors

Certificate of Incorporation (CIN)

Memorandum of Association and Article of Association

E- PAN of Company

E- TAN of Company

Professional Tax Registration ( In Maharasthra )

GST Registration ( If required seperately chargeble )

Shop and Establishment Registration

Compliances

Transparency, accountability, and protecting stakeholder interests all start with timely compliance. Our team ensures your regulatory filings are handled smoothly and efficiently. These compliance obligations typically fall into four key categories. Want to stay ahead and compliant? Reach out to our expert startup consultants for tailored guidance.

One Time Compliances

Post-incorporation, companies are required to complete certain one-time formalities such as appointing the first statutory auditor, filing a declaration to commence business, and issuing share certificates to shareholders

Event Based Compliances

Change of Directors, Change of regd. Address,Allotment of shares etc

Regular Compliance

Accounting , Tax Filing , Maintenance of records and registers etc

Annual Compliance

ROC Annual filing, Audit of financial statement, ITR filing etc