The most credible structure for a non profit. Better governance and donor confidence than a trust or society, which matters when you are applying for grants or CSR funding.
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TIMELINE
15 to 25 working days
MINIMUM MEMBERS
2 directors, 2 shareholders
GOVERNED BY
Companies Act, 2013
BEST FOR
NGOs seeking grants and CSR funds
What is included
Digital Signature Certificates for directors
Name reservation with the MCA
Section 8 licence application
Drafting of objects clause, MOA and AOA
SPICe+ incorporation filing
Certificate of Incorporation
Company PAN and TAN
Guidance on 12A, 80G and CSR registration
Documents you will need
From every director and shareholder
PAN card
Aadhaar card
Passport size photograph
Address proof not older than two months
For the registered office
Latest utility bill for the premises
Rent agreement, if rented
No Objection Certificate from the owner
Statement of proposed activities and projected income
How the filing runs
Objects and name
The charitable objects are drafted first, because the licence turns on them. The name is then reserved.
Licence application
The application for a Section 8 licence is filed with the projected income and expenditure statement and a declaration of intended activities.
Incorporation
Once the licence is granted, incorporation is filed and the Registrar issues the Certificate of Incorporation.
Tax registrations
12A and 80G registrations are applied for separately, and CSR-1 is required before receiving corporate CSR funds.
Incorporation alone does not make donations tax deductible
A Section 8 licence establishes the non profit character of the company. It does not by itself exempt your income or make donations deductible for the donor. That requires separate 12A and 80G registrations with the Income Tax Department, and CSR-1 registration before any company can route CSR funds to you. Organisations frequently incorporate, start fundraising, and only then discover the donor cannot claim a deduction.
A Section 8 Company has the strongest governance and is usually preferred by institutional donors and CSR funders. Trusts and societies are quicker and cheaper to set up but carry less credibility with large funders.
Reasonable remuneration for actual services rendered is permitted, but it must be genuine and proportionate. Using salaries to distribute surplus risks the licence.
Only with separate FCRA registration or prior permission from the Ministry of Home Affairs. A Section 8 licence does not permit foreign contributions on its own.