Section 8 Company Registration:
Fuel Your Vision for Social Change.
Formerly known as Section 25 Companies, these are the gold standard for Schools, Hospitals, and Temples. Get 12A & 80G ready with Bengaluru’s legal experts.
The Modern NGO: Section 8 Advantage
Many founders still ask about Section 25 Companies. Under the Companies Act 2013, Section 25 was replaced by Section 8. This shift introduced stricter governance but gave NGOs the “Limited Company” status without the need to use “Pvt Ltd” in their name.
Comparison: Section 8 vs. Trust vs. Society
| Feature | Section 8 Co. | Trust | Society |
|---|---|---|---|
| Credibility | Highest (MCA Regd) | Moderate | Low to Moderate |
| FCRA Pref. | Highly Preferred | Low | Moderate |
| Governance | Board of Directors | Trustees | Governing Body |
Unlocking 12A & 80G Tax Exemptions
A Section 8 company is technically “taxable” unless it applies for specific exemptions. At Team IN Filings, we bundle these as part of our setup:
- 12A Registration: Ensures that all the income (donations/grants) received by your NGO is 100% Tax-Exempt.
- 80G Certification: This is a “Donor’s Delight.” It allows your donors to claim a 50% tax deduction on their contribution, making it easier for you to raise funds.
- CSR-1 Filing: Mandatory in 2026 to accept Corporate Social Responsibility funds from companies in Bengaluru.
Step-by-Step Registration Process 2026
In 2026, the Ministry of Corporate Affairs (MCA) has streamlined the process via the SPICe+ Web Form. Here is the chronological flow:
Step 1: Digital Signature (DSC) & DIN: We obtain Class 3 DSCs for all directors. The Director Identification Number (DIN) is now integrated within the incorporation form.
Step 2: Name Reservation (RUN): We suggest two unique names reflecting your mission (e.g., “Namma Bengaluru Foundation”). Terms like Foundation, Forum, or Council are preferred.
Step 3: Section 8 License (INC-12): This is the unique “License” phase where the Regional Director reviews your 3-year vision and financial estimates.
Step 4: Spice+ Part B Filing: Final submission of the Certificate of Incorporation (COI) along with PAN, TAN, and the mandatory AGILE-PRO for Bank/GST setup.
Mandatory Document Checklist & Timeline
Setting up a non-profit requires specific paperwork to prove both identity and intent.
| Category | Documents Required | Timeline |
| Identity Proof | PAN, Aadhaar, and Digital Photo of all Directors/Members. | Day 1-2 |
| Address Proof | Latest Bank Statement or Utility Bill of Directors. | Day 1-2 |
| Registered Office | Latest Electricity Bill (BESCOM) + Rental Agreement + NOC from Owner. | Day 3-5 |
| Legal Drafting | Memorandum (MOA) & Articles (AOA) with Non-Profit Clauses. | Day 5-7 |
| Final License | Approval from Central Registration Centre (CRC). | Day 15- |
Fee Structure & Estimated Costs
Transparent pricing is key for NGOs. Here is a breakdown of the typical investment for a Section 8 setup in Bangalore.
| Component | Government Fees | Professional Fees (Team IN) |
| DSC & DIN | ₹1,500 – ₹3,000 | Included |
| Name Reservation (RUN) | ₹1,000 | Included |
| License (INC-12) | Nil (for small NGOs) | ₹4,000 – ₹7,000 |
| Incorporation & Stamp Duty | State-dependent (Approx ₹2,000) | ₹6,000 – ₹10,000 |
| TOTAL ESTIMATE | ₹4,500 – ₹6,000 | ₹10,000 – ₹17,000 |
The Ultimate Comparison – Why Section 8 is Better?
| Feature | Section 8 Company | Public Charitable Trust | Society |
| Governing Act | Companies Act, 2013 | Indian Trust Act, 1882 | Societies Act, 1860 |
| Credibility | Highest (Global & CSR) | Low to Moderate | Moderate |
| Transparency | Very High (Annual Audits) | Low (Private) | Moderate |
| FCRA Approval | Highly Preferred | Difficult | Moderate |
| Sustainability | Perpetual Succession | Depends on Trustees | Elected Body |
Maximizing Tax Benefits (12A, 80G & CSR-1)
A Section 8 company is built for tax efficiency. Here is how we maximize your benefits:
- Section 12A Registration: We file this immediately after incorporation so that 100% of your NGO’s income remains Tax-Free.
- Section 80G Certification: This is your fundraising tool. It allows donors to claim a 50% tax deduction, encouraging larger contributions.
- CSR-1 Registration: In 2026, companies in Bangalore’s tech parks want to give CSR funds. We register you on the MCA portal with Form CSR-1 to make you eligible for these corporate grants.
- NGO Darpan: We help you get your unique ID from NITI Aayog, which is mandatory for applying for Government Grants.
Frequently Asked Questions
Q: Can a Section 8 company be started by just one person?
No. You need a minimum of two directors and two shareholders. However, the same two people can be both directors and shareholders.
Q: Can we pay salaries to the directors in a Section 8 company?
Section 8 prohibits the distribution of profits (dividends). However, you can pay a reasonable salary for actual services rendered by a director (e.g., if they are working as a full-time administrator or doctor).
Q: Is it possible to convert a Section 8 back to a Private Limited?
It is legally possible but extremely difficult and involves surrendering all tax benefits and paying back concessional land/assets. It is intended to be a permanent non-profit structure.