NGO - LegaLaunch Advizer

NGO as Section 8 Company in India: A Complete Guide

Non-Governmental Organizations (NGOs) play a vital role in social development, welfare, and charitable activities in India. One of the most preferred legal structures for NGOs is the Section 8 Company under the Companies Act, 2013. This format offers credibility, transparency, and greater trust from donors and government bodies.

What is a Section 8 Company?

A Section 8 Company is a non-profit company formed with the objective of promoting commerce, arts, science, sports, education, research, social welfare, religion, charity, or environmental protection. Unlike other companies, Section 8 companies do not aim to earn profits but to reinvest any income back into their objectives.

Key Features of Section 8 Company

• Non-Profit Objective: Income must be used to promote the company’s goals, not distributed as dividends.
• Separate Legal Entity: Has a distinct legal identity separate from its members.
• Limited Liability: Members’ liability is limited to their contribution.
• Higher Credibility: Preferred by donors, foreign funding agencies, and government schemes.
• Perpetual Succession: The company continues to exist despite changes in membership.

Regulated Compliance: Governed under the Companies Act with prescribed compliance norms.

Eligibility & Requirements

• Minimum 2 members and 2 directors
• Registered office in India
• Clear non-profit objectives aligned with the law
• No minimum capital required
• Apply for license under Section 8 of the Companies Act, 2013

Registration Process

1. Name Approval from the Registrar of Companies (ROC)
2. Apply for Section 8 License by submitting the required documents (MOA, AOA, Declaration, and other affidavits) to the ROC
3. Incorporation of the company after license approval
4. Issue of Certificate of Incorporation and Section 8 license

Time & Cost

• Timeline: Usually 4–6 weeks depending on document preparedness
• Costs: Government fees + professional/legal fees (varies)

Why Choose Section 8 Company for NGO?

• Legal recognition and corporate status
• Eligibility for CSR funding and government grants
• Transparency and trust for donors and beneficiaries
• Ability to enter contracts and own assets in the company’s name
• Easier access to international funding

Conclusion

Registering your NGO as a Section 8 Company is a strategic move that ensures legal protection, credibility, and sustainability for your social mission. It is ideal for NGOs aiming to operate professionally with clear governance and accountability.

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