Section 8 Company Registration: how a not-for-profit company works

A Section 8 company is a not-for-profit company registered under section 8 of the Companies Act, 2013 to promote objects such as education, charity, social welfare, art, science, sports, research or environmental protection. It must use all its income and profit for those objects and can never pay a dividend to its members. It is incorporated on the Ministry of Corporate Affairs (MCA) portal through SPICe+, which also issues the Section 8 licence.

Many founders, families and professional groups choose it over a trust or society because it has a clear legal framework, limited liability and credibility with donors and CSR funders. This post explains how it works, how Section 8 Company Registration is done, and what it must do every year.

What can a Section 8 company be formed for?

Section 8 allows a company to be registered if it intends to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any similar object. Three conditions apply for its whole life:

• its profits and other income are applied only to promoting its objects;
• it cannot pay any dividend to its members;
• on winding up, any surplus goes to another Section 8 company with similar objects or to a fund set up by the government, not back to members.

"Not-for-profit" does not mean it cannot earn. A Section 8 company can charge fees, sell goods or services and make a surplus. It simply cannot distribute that surplus to its members. It can pay reasonable salaries and professional fees for actual services.

Section 8 company vs trust vs society

Point	Section 8 company	Public charitable trust	Society
Law	Companies Act, 2013 (central)	State public trust laws, where they exist	Societies Registration Act, 1860 or state versions
Registered with	MCA / Registrar of Companies	Charity Commissioner or sub-registrar, depending on state	State Registrar of Societies
Minimum people	2 directors and 2 members (private)	Usually 2 trustees	Usually 7 members (varies by state)
Separate legal entity	Yes	Not in the same way; trustees hold property	Yes, in most states
Limited liability	Yes	No	Limited, varies
Yearly compliance	Higher: audit and MCA filings	Lower, varies by state	Moderate, varies by state
Change of management	Easy, by board or members' resolution	Governed by trust deed; can be rigid	Governed by rules and bye-laws

Rules for trusts and societies differ widely by state, so check your state's law before comparing.

Who can form a Section 8 company?

Individuals, companies and other bodies can be members. A private Section 8 company needs at least two members and two directors, and a public one needs at least seven members and three directors. At least one director must have stayed in India for 182 days or more during the financial year. A One Person Company cannot be a Section 8 company. There is no minimum capital, and a Section 8 company can also be formed without share capital.

What should the name look like?

A Section 8 company does not have to use "Limited" or "Private Limited" in its name. Instead, the name must include one of the words prescribed for such companies, such as Foundation, Forum, Association, Federation, Chambers, Confederation, Council or Electoral Trust. The name should also reflect its objects, and restricted words need approval as usual.

How does Section 8 Company Registration work?

Since the 2020 amendments, the separate licence application is no longer needed; the licence is issued through the SPICe+ form itself. The broad steps are:

1. DSCs: obtain Digital Signature Certificates for the proposed directors and subscribers.
2. Name: reserve the name in SPICe+ Part A (or RUN).
3. Draft documents: the Memorandum of Association (with the charitable objects and the no-dividend clause) and Articles of Association, in the formats prescribed for Section 8 companies, along with declarations from the subscribers and a professional.
4. File SPICe+ Part B: with the linked e-MoA, e-AoA and other forms, on the MCA portal. There is no MCA filing fee where authorised capital is up to ₹15 lakh; state stamp duty applies.
5. Licence and certificate: once approved, the company receives its licence under section 8 and the Certificate of Incorporation, along with PAN and TAN.

The same general document rules apply as for any company, such as recent office address proof and matching identity details. See the Before you register lessons.

Is a Section 8 company automatically exempt from income tax?

No. Incorporation under section 8 does not by itself give tax exemption. The company must separately apply to the Income Tax Department. Under the Income-tax Act, 2025, in force from 1 April 2026, Registration of non-profit organisations is in section 332 (the earlier 12A/12AB Registration), and approval that lets donors claim a deduction is in section 354 (the earlier 80G approval). A new organisation usually gets provisional Registration first, and must then apply for regular Registration within the time allowed. Check the current forms on the Income Tax Department portal.

Two other Registrations are common:

• CSR-1 Registration with the MCA, required to receive Corporate Social Responsibility (CSR) funds from companies as an implementing agency.
• FCRA Registration or prior permission from the Ministry of Home Affairs, required before accepting any foreign contribution.

If it supplies taxable goods or services above the threshold, it may also need GST Registration.

What are the yearly compliances?

• Statutory audit of accounts every year.
• Board meetings (Section 8 companies have some relief on the number of meetings) and an annual general meeting.
• Financial statements in AOC-4 and annual return in MGT-7 with the Registrar of Companies. A Section 8 company cannot be a "small company", so it does not get small-company relaxations.
• DIR-3 KYC for each director once every three financial years, due by 30 June.
• Income tax return and any filings required by its income tax, CSR or FCRA Registrations.

The Central Government can revoke the licence if the company breaks its conditions, and then order it to be wound up or merged with another Section 8 company. Changing its objects or converting it into another kind of company needs government approval. The Life after Registration lessons explain the common company filings.

Is a Section 8 company right for you?

It usually suits you if you want to run an organised, long-term not-for-profit activity, want corporate governance that donors and CSR teams recognise, and can handle yearly MCA compliance. A trust or society may be simpler for a small local initiative. If you want to earn and distribute profit, a Section 8 company is the wrong choice; see Company Registration in India: every option explained for the for-profit options.

Key takeaways

• A Section 8 company is a not-for-profit company that must apply all income to its objects and cannot pay dividends.
• It is registered through SPICe+ on the MCA portal, which also issues the Section 8 licence.
• It needs no "Limited" in its name, but must use a word such as Foundation, Association or Council.
• Tax exemption and donor deduction need separate income tax Registrations; CSR and foreign funds need further Registrations.
• It has full company compliance every year, without small-company relief.