Startup

Overview

A Section 8 Company is a not-for-profit organization registered under the Companies Act, 2013, with the objective of promoting charitable, social, or cultural causes. It operates as a separate legal entity and enjoys tax exemptions and other benefits while being prohibited from distributing profits to its members. Commonly established for social welfare, education, research, or environmental protection, it is ideal for NGOs and trusts.

Advantages

• Tax Benefits: Eligible for exemptions under Income Tax Act provisions.
• Separate Legal Entity: Distinct identity from its members and directors.
• Credibility: Higher trust and recognition compared to other non-profit entities.
• Limited Liability: Protects members' personal assets from organizational liabilities.
• Exemption from Minimum Capital Requirement: Can be started without a minimum capital.

How Fibils Helps

• Hassle-Free Registration: Complete support with incorporation and document preparation.
• Tax Exemption Assistance: Help with 80G and 12A certification for income tax exemptions.
• Compliance Solutions: Guidance on annual filings, FCRA, and regulatory obligations.
• Tailored Advisory: Expert solutions to structure the organization for maximum impact.

Eligibility Criteria

• Minimum two directors and two members.
• At least one director must be a resident of India.
• The objective of the organization must align with charitable, social, or cultural purposes.
• Profits must be reinvested into the organization, not distributed among members.

Documents Required

• PAN and Aadhaar cards of all directors and members.
• Address proof of directors (utility bill, voter ID, etc.).
• Proof of registered office (utility bill, rent agreement, or property documents).
• Passport-sized photographs of directors.
• Draft MOA and AOA stating the objectives of the organization.

Process

• Apply for name reservation through the MCA portal.
• Draft MOA and AOA focusing on the charitable objectives.
• Submit required documents to Fibils for verification and approval.
• Obtain Section 8 license from the Registrar of Companies (ROC).
• Obtain the Certificate of Incorporation.
• Apply for tax exemptions like 12A and 80G registration.

Features

• Operates exclusively for charitable, educational, or public welfare purposes.
• Prohibited from distributing profits to members.
• Enjoys legal status as a separate entity.
• Requires stringent compliance with ROC and other authorities.

Types

• Educational Section 8 Company: Focused on schools, universities, and training centers.
• Environmental Section 8 Company: Promotes sustainability and conservation.
• Cultural Section 8 Company: Engages in preserving heritage, art, and culture.
• Healthcare Section 8 Company: Works on public health initiatives and medical aid.

FAQs
Q1: Can a Section 8 Company generate profits?
A: Yes, but profits must be reinvested into the organization’s objectives and not distributed.

Q2: Is there a tax exemption for donations to a Section 8 Company?
A: Yes, donors can claim tax deductions under Section 80G, provided the company has obtained the certification.

Q3: Can foreign funds be received by a Section 8 Company?
A: Yes, but only after registering under the Foreign Contribution Regulation Act (FCRA).

Q4: Is an audit mandatory for a Section 8 Company?
A: Yes, a Section 8 Company must undergo statutory audits annually.

Empower your cause with a Section 8 Company! Partner with Fibils for seamless registration, compliance, and tax exemption assistance.