How to Register Section 8 Company in India for NGO?

Forms Required for Section 8 Company Registration
There are some forms required when registering section 8 companies, such as Form INC-13 Memorandum of Association (MoA) & Articles of Association (AoA), Form INC-15 a declaration by members; a Digital Signature Certificate (DSC), SPICE+ used for incorporating a company; Form DIR 3 Director Identification Number (DIN); INC-12, application for a license; INC-14 declaration from a practicing CA, Form INC-16 license to incorporate as section 8 company; INC-22, situation of registered office; DIR 2, consent of directors; DIR 12 appointment of directors; etc.

The Process to Register a Section 8 Company
As we learn before the eligibility to register the section 8 companies, check all these eligibilities and prepare all of these documents, such as a Memorandum of Association (MoA), Articles of Association (AoA), etc.
Documents required to register a section 8 company:
Passport-sized photographs, ID proof, recent bank statements of directors and shareholders, the last 2 months of electricity and water bills, the rent agreement and NOC if the office is rented, the MoA & AoA, the DSC, and relevant resolutions and declarations for any foreign entities or unregistered companies.
Keep in mind the required forms & documents to follow these steps when registering:
1. Obtain a DSC after receiving the file from DIR-3. ID proof and address proof need to be attached when obtaining DSC.
2. The ROC allots a DIN to the proposed directors once the DIR-3 is approved.
3. With the attachment of ID proofs, file INC-12 with ROC to apply for a license for a section 8 company.
4. Once the form is approved, a license for a section 8 company will be issued in Form INC-16.
5. File the SPICe+ Form after completing all the steps.
You will get a certificate of incorporation along with a CIN (Company Identification Number) if the ROC (Registrar of Companies) is satisfied with the form you submit.

Benefits of Section 8 Company for NGOs
Section 8 companies provide some benefits for NGOs, such as:
1. These companies are eligible for tax exemption on their income used for charitable purposes, which means more funds are dedicated to NGO activities under 12A and 80G of the Income Tax Act of 1961.
2. These types of companies are separate legal entities from their members. It means the company can own the property.
3. Unlike other companies, there is no need for the requirement to maintain minimum capital for section 8 companies.
4. To attract funding, these companies can build trust with potential donors.
5. They get limited liability, meaning members of these companies are only liable to the extent of their contributions.
6. The process of registration is easy for Section 8 companies compared to other organizations.

Disadvantages of Section 8 Company
Apart from the benefits of section 8 companies for NGOs, there are so many disadvantages of these companies.
1. One of the main disadvantages is that whatever the profit generated or earned by the company is not for its members or shareholders. We share this above in the blog you can check.
2. Only engage with the activities that come and align with charitable and social welfare purposes.
3. Government authorities closely monitor all documents and compliance with regulations.
4. Maintaining compliance with statutory requirements is a burden.
5. Raising funds is so challenging.