Non-Profit Company
To run an NGO in India, a non-profit organisation can be registered under any of the three options as given below:
- Trust Registration by executing a Trust deed or
- Society Registration under the Registrar of Societies, or
- Section 8 Company under the Companies Act. 2013
Well, you can register an NGO/NPO Section 8 Company in the fields of promotion of arts, commerce, charity, education, protection of environment, science, social welfare, sports, research and religion.
The Companies Act defines a Section 8 company as one whose objectives is to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives..
Section 8 Company has become the most preferred form of Non-Profit Organization (NPO) or Non-Governmental organizations (NGO) in India due to its easy registration process, online secured data with www.mca.gov.in and many Features & Benefits because it functions exactly like a limited company (including all the rights and obligations that come with such a company). It has the authority to work anywhere in India.
Section & Company works as the Non-Profit Organizations. When we say not for profit, it does not mean that Section 8 Company cannot earn profits. In fact, such NGO/NPO can generate profits but the income of the Section 8 Company must be used to promote only charitable objects and it cannot pay any dividend to the members of the company.
This company is similar to trust and society, an exception to this is that Trust and Societies get registered under State Govt. Regulation whereas a Section & Company is registered online under aegis of Ministry of Corporate Affairs, Government of India.
Documents Required for Section 8 Company Registration
To register an NGO as Section 8 Company, we require certain fixed documents whose quick checklist has been given below for your easy understanding:
Photograph of all the Directors
PAN Card of all the Directors
ID Proof of all the Directors (Driving License/Passport/Voter ID)
Residence Proof (Bank Statement/Mobile Bill/Telephone Bill/Utility Bill)
Electricity Bill or any other utility bill for the address proof of the Registered Office (along with Rent Agreement and NOC on case to case basis)
We draft registration documents and send the same to you for signing.
Procedure for Section 8 Company Registration
Below are the stages of registering a Section 8 Company:
Application of Digital Signature Certificate (DSC);
Obtaining the Director Identification Number (DIN):
Reservation of name of the Section 8 Company:
Drafting of Memorandum of Association (MOA):
Drafting of Articles of Association (AOA); and
Receiving Certificate of incorporation (COI).
Features & Benefits
- Tax benefits: Section & Company being a non-profit organization, they leverage the exemption from the provision of income tax under section 12A and the donors also get tax deductions under section 80G of the Income Tax Act, 1961 respectively.
- Zero Stamp Duty: A Section 8 company do not have to pay stamp duty on the AOA and MOA on its incorporation, which is compulsorily applicable on other forms of companies.
- The ease at transferring ownership/title: The limited liability companies do not have the advantage to transfer their title or ownership, but the Income tax Act. 1961 does not confide Section 8 companies to transfer their ownership or title thereby. enabling the transfer of both movable and immovable interest without any hurdles or restrictions.
- Exempted from "Limited" name: In contrast to other limited companies who are under obligation to use their company's name as 'limited company, section 8 companies get exemption from the use of any such title. They use the word like Foundation, Association, Chamber, Confederation etc.
- Separate legal entity: Section 8 company has a distinct legal entity which means the company's existence is different from its members. The company has a perpetual existence along with greater flexibility.
- Uniform Registration: Section 8 Company gets nationwide uniform registration unlike the other forms of NGOs, like Trust and Society. Further, their names are secured under CRC-MCA.
- CARO Not Applicable: Requirements of Companies Auditor's Report Order or CARO do not apply to Section & Company.
- Credibility in the eyes of public: Section & Companies more reliable than Trust and Societies. They are regulated like any other limited company strictly and have to follow the rules and regulations under Companies Act, 2013. This gives a trust and credibility in the eyes of public at large.