Section 8 Company Registration & Compliance
What is a Section 8 Company?
A Section 8 Company is a non-profit entity incorporated under Section 8 of the Companies Act, 2013, with the primary objective of promoting:
- Charity or Social Welfare
- Education or Art
- Science, Culture, Sports, or Environment
- Research, Religion, or Philanthropy
Such companies apply profits or income toward their cause and are prohibited from distributing dividends to members. Section 8 Companies are ideal for NGOs, social enterprises, trusts, foundations, and CSR arms of corporates.
A Section 8 Company enjoys tax benefits, enhanced credibility, and is governed by stricter compliance protocols compared to Trusts and Societies.
Key Features of a Section 8 Company
- Limited company status with non-profit motive
- No minimum capital requirement
- Perpetual succession and separate legal identity
- Eligible for tax exemptions under Section 12A and 80G
- Higher compliance obligation for transparency and funding eligibility
Why Choose a Section 8 Company?
- Recognized legal entity with high donor confidence
- Eligible for CSR funding, international grants, and government affiliations
- Allows tax deductions to donors under Section 80G
- Eligible for foreign contributions after FCRA registration
- Exempt from using 'Ltd.' or 'Pvt. Ltd.' in its name
Compliance Requirements for Section 8 Companies
| Compliance Area | Key Filings |
|---|---|
| Annual ROC Filings | AOC-4, MGT-7A |
| Director Compliance | DIR-3 KYC, MBP-1, DIR-8 |
| Income Tax Return | ITR-7 under Sections 12A/10(23C) |
| Audit & Financials | Form 10B/10BB, Annual Accounts Audit |
| TDS Compliance | 24Q/26Q filings and payment |
| CSR Reporting | CSR-2 if applicable |
| Foreign Investment Reporting | FC-GPR/FLA (if FDI received) |
| FCRA Filing | FC-4, FC-6 (if registered for foreign contributions) |
Note: Non-compliance may result in loss of tax exemption, penalties, or cancellation of license under Section 8.
Documents Required for Section 8 Company Registration
- PAN, Aadhaar, and Email ID of all directors
- Passport-size photos
- Utility bill & NOC from owner for registered address
- Draft MOA and AOA aligned with not-for-profit objects
- Declaration from directors (INC-14 & INC-15)
- Digital Signature Certificate (DSC)
- Consent to act as Director (DIR-2)
Step-by-Step Registration Process
- Name approval through SPICe+ Part A
- Document drafting & Digital Signature registration
- File SPICe+ Part B, INC-9, MOA, AOA
- Receive COI (Certificate of Incorporation) from MCA
- Apply for PAN & TAN
- File Form INC-20A (Declaration of Commencement)
- Apply for 12A/80G exemption with the Income Tax Department
Post-Incorporation Compliance
| Compliance | Timeline |
|---|---|
| Commencement Certificate (INC-20A) | Within 180 days of incorporation |
| Appointment of Auditor (ADT-1) | Within 30 days of incorporation |
| Annual Return (MGT-7) | Within 60 days of AGM |
| Financials (AOC-4) | Within 30 days of AGM |
| CSR-1 & CSR-2 Filing | Annually (for CSR-recipient entities) |
| Tax Return (ITR-7) | By 31st October (if audited) |
| Tax Audit (if applicable) | If receipts > ₹1 crore |
Tax Benefits Available to Section 8 Companies
| Provision | Benefit |
|---|---|
| Section 11 | Exemption on income used for charitable/religious purposes |
| Section 12A | Registration for tax exemption eligibility |
| Section 80G | Allows donors to claim 50%-100% deduction on contributions |
| GST | No registration needed if aggregate turnover < ₹20 lakhs (₹10 lakhs for NE states) |
| FCRA | Permission for foreign funding after 3 years of activity & eligibility |
Penalties for Non-Compliance
| Non-Compliance | Penalty |
|---|---|
| Delay in Annual Filings | ₹100 per day per form (AOC-4 / MGT-7) |
| Violation of Section 8 conditions | Revocation of license + ₹10 lakh fine + prosecution under Companies Act |
| Missed CSR reporting | ₹1 lakh penalty on company + ₹50,000 on officer in default |
| Not renewing 12A/80G (after expiry) | Loss of tax exemption status & donor benefit |
How CACSFinacc Helps with Section 8 Company Setup & Compliance
Company Registration (MCA)
- Name approval (SPICe+), DIN, DSC, drafting of MoA & AoA
- Filing of INC-12 for Section 8 License
Post-Incorporation Compliance
- PAN, TAN, GST, Professional Tax, MSME registration
Income Tax Exemptions
- Filing of Form 10A for 12AB & 80G registration
- Assistance with Form 10B/10BB audit filings
Annual Filings
- ROC (AOC-4, MGT-7A), CSR-2, and MCA board meeting documentation
FCRA, CSR & Donor Compliance
- FCRA registration (if applicable), RBI reporting, donation tracking
End-to-End Bookkeeping
- Maintenance of books, financial reports, vouchers, and asset registers
Why Choose CACSFinacc for Section 8 Company Services?
- End-to-end assistance from registration to audit and ITR
- 100% on-time ROC, Income Tax, and CSR filings
- Guidance on FCRA registration, foreign donor due diligence, and RBI filings
- MOA & AOA Drafting with NGO Object Clauses
- Expert Filing of 12A, 80G, CSR-1, CSR-2, and ITR-7