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Section 8 company  Registration Registration in India


Section 8 company is defined as a company that is licensed under Section 8 of the Companies Act, 2013. It is a legal form of a Non-Profit Organization (NPO) or Non-Governmental Organization (NGO), established to promote sports, education, arts, science, commerce, research, etc.

These companies are registered for charity, social welfare, and meeting the organizational goal that benefits society as a whole. A section 8 Company is authorized to work anywhere in the country.

Such companies pay no dividends to any of their members and instead use their profits to further their cause.

A Section 8 Company is the same as Section 25 of the former Companies Act of 1956. Section 25 has now become Section 8 in the 2013 Companies Act. However, the new Act has expanded the set of available objectives for Section 8 companies.

The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industries (CII) are well-known examples of Section 8 Companies in India. These organizations work to encourage the expansion of trade and commerce in India.

A non-profit organization in India can be constituted under Section 8 of the Companies Act, 2013, as a non-profit company, or under the Registrar of Societies.


The following distinctive characteristics of a Section 8 company are lacking from the majority of other kinds of companies:

Sr. No. Feature Explanation
1 Charitable objectives Section 8 companies do not aim at making profits. These companies are registered for charity, social welfare, and meeting the organizational goal that benefits society as a whole
2 No minimum share capital is needed. Section 8 companies do not need a minimum amount of paid-up share capital.
3 Limited Liability Members of Section 8 Company can only have limited liability.
4 Government license needed. Such companies can operate only if they have a valid license approved by the Central government.
5 Benefits and exemptions Because of their philanthropic objectives, many benefits and exemptions have been accorded to such companies by the Companies Act.
6 Firms as members Section 8 also allows firms to become members of such companies.


  • Under Section 8 of the Companies Act, a person or an association of persons may submit an application to the Registrar of Companies using the required documents to establish a company with charitable objectives.
  • The applicant needs to make an application in SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus: INC-32)] Form together with the fees for application as mentioned in the Companies (Registration offices and fees) Rules, 2014 to the Registrar, who shall, if found fit, issue the license after obtaining the necessary documents.
  • These are registered as Limited companies under the Companies Act , 2013 and will continue to be considered as such even though their names do not contain the word "Limited. They might've been registered either as "Private Limited or Public Limited Companies.
  • Additionally, unlike all other companies, these companies are exempt from the need to include the words "Limited" or "Private Limited" at the end of their names.
  • These companies are not permitted to alter their Articles Of Association (AOA) or Memorandum Of Association (MOA) without the consent of the Central Government because their very survival depends on the license issued to them. Additionally, they are not permitted to engage in any activities that the license forbids.


Section 8 companies need to obtain a valid license from the Central Government for their functioning. Additionally, all such licenses are revocable for the reasons listed below:

  • If the terms of the license are breached or not followed upon,
  • The company violates the provisions of Section 8 of the Companies Act, 2013,
  • When its actions are fraudulent or when they contravene their own goals and the public policy.

Under certain conditions, the government may even order the company to be dissolved or merged with another business of a similar nature. The government has to hear the company’s stance before passing such orders.


  • Companies under Section 8 may choose to wind up or dissolve themselves voluntarily or pursuant to Central Government directives.
  • The National Company Law Tribunal (NCLT) may order the transfer of any assets that are left over after debts and liabilities have been satisfied following such winding up to another company that operates similarly.
  • Additionally, NCLT ( National Company Law Tribunal) has the authority to mandate the sales of assets of the company, with the sale's revenues being added to the Insolvency and Bankruptcy Fund.


  • Any company that operates in contravention with regard to the provisions mentioned in Section 8 of the Companies Act is punishable with a fine ranging from Rs. 10 lakhs to Rs. 1 crore.
  • Additionally, directors and officers of the firm are liable to be punished, which includes a fine ranging from Rs. 25,000 to Rs. 25 lakhs and a term of jail up to 3 years.
  • If these officers engage in any activities with fraudulent intentions, they may also be prosecuted in accordance with the strict guidelines of Section 447 (which deals with fraud).


Within a period of one year from its incorporation, every Nidhi needs to ensure that it has:

  • According to Section 8 of the 2013 Companies Act, Non-Profit Organizations are eligible for a number of exemptions and privileges. Such companies are also eligible for a number of tax benefits. Even the donors who make contributions to the Section 8 Companies may claim tax exemptions for their contributions.
  • Additionally, instead of traditional NGOs and associations, people typically prefer to create Section 8 companies to carry out charity work.
  • Moreover, generally people prefer to create Section 8 Companies because of their limited liability, which prevents the use of their personal assets to settle business debts.
  • These are some benefits that Section 8 companies get to enjoy:
    • Separate legal Entity: Section 8 Company, unlike its members, is a distinct legal entity. It has perpetual existence. It also has more flexibility and well-organized operations.
    • Limited Liability: Limited liability prevents the use of the owner’s personal assets to settle business debts.
    • Perpetual existence: Until they are formally disbanded, these companies exhibit perpetual existence. The company remains in existence, irrespective of the demise or dismissal of its members.
    • Donors can claim tax exemptions: Individuals who donate to Section 8 Companies are eligible for tax exemptions under Sections 12A and 80G of the 1961 Income Tax Act.
    • Higher credibility: Since they are licensed by the Central Government, they have more credibility as compared to NGOs, societies, and trusts.

Section 8 Company Registration FAQs

Section 8 Company Registration Common Questions

Is it necessary that the name of a section 8 company shall contain words like "Foundation," "Forum," "Association," "Federation," "Chamber," "Confederation," "Council," and "Electoral Trust," among others?

Yes. In accordance with Rule 8 of the Companies (Incorporation) Rules, 2014, the name of a company created in accordance with Section 8 of the Act must contain the terms "foundation," "forum," "association," "federation," "chambers," "confederation," "council," "electoral trust," and similar terms.

Is it possible for a partnership firm to become a member of a Section 8 company?
3 days ago

Yes. A partnership firm may become a member of the Section 8 Company in accordance with the provisions of section 8(3).

Is it possible for a body corporate or company to become a member of a Section 8 company?
3 days ago

Yes, A body corporate or company may become a member of a Section 8 Company.

Is it possible for a section 8 company to pay dividends to its members?
3 days ago

No, Such companies pay no dividends to any of their members and instead use their profits to further their societal cause.

Is it possible for a partnership firm or LLP to become a member of a Section 8 company?
3 days ago

Yes, A partnership firm or LLP may join Section 8 Company as its members.

What is the minimum amount of capital needed to register a Section 8 Company?
3 days ago

Section 8 companies do not need a minimum amount of paid-up share capital for their registration.

Is it possible to incorporate an OPC or convert an existing OPC into a Section 8 company?
3 days ago

As per Rule 3 of the Companies (Incorporation) Rules, 2014, Any one-person company cannot be incorporated or converted into a Section 8 company.

Does Section 8 Company have the authority to engage in microfinance activities?
3 days ago

Yes, Section 8 Companies are permitted to engage in microfinance activities as long as they follow the relevant provisions of the RBI Act, guidelines, and directives. According to the Companies Act of 2013 Section 8(1)(a), microfinance activities should be used to promote activities.

How are the properties held by Section 8 companies managed?
3 days ago

The company's properties are held in its name and may be sold in accordance with the regulations outlined in the Companies Act, 2013 ( For instance, an approval from the BOD(Board of Directors), expressed in the form of a resolution).

Is it possible for a section 8 company to raise overseas funding?
3 days ago

Yes, Foreign contributions are only permitted after registration under the 1976 Foreign Contribution Regulation Act (FCRA). Only three years following the registration date can an FCRA license be applied for. But you can ask the commissioner for permission in advance if you need some truly urgent international donations.

*disclaimer:we try our best to keep the above provided information updated, the data provided keeps changing by amendments and changes in related statute/acts and other Govt published advisory and we don't claim that all information is always correct, the content is for informational purpose only, Intine.CO (QuickU Technology solutions pvt ltd) and its associates bear not responsibility of any loss because of actions taken based on the information on this page or any other page of this website.

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