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One Person Company Registration

What is Section 8 company?

A Section 8 company is a registered organization with charitable objectives such as promoting arts, science, education, sports, protecting the environment, religion, and charity. Despite being a non-profit organization, it can generate profits; however, it is forbidden to distribute them among its members. Instead, all revenue or profit must be used for the charitable purpose it was registered for. The Companies Act of 2013 provides a special status to Section 8 companies due to their charitable objectives. They are eligible for exemptions and relaxations that other types of companies are not entitled to.


Benefits of incorporation of Section 8 company

Tax and compliance exemptions

An organization that registers under Section 8 of the Companies Act obtains a distinctive status that differentiates it from other entities. This status provides the company not only with tax exemptions but also enables donors to claim tax exemptions on their contributions in accordance with Income Tax regulations. Besides the tax benefits, the company is relieved from adhering to certain regulatory provisions.

Separate legal identity

As a registered company, it attains an independent identity distinct from its members. This enables it to own and manage assets and liabilities in its name, regardless of any connection with its members. The company's existence, assets, liabilities, rights, and obligations remain unaffected by changes in membership or directors.

Limited Liability

A Section 8 registered company provides its members with limited liability. The liability of members is restricted to the capital subscribed and outstanding, and losses or obligations do not impact the personal assets of directors or members. This allows promoters to operate non-profit organizations without the burden of personal liability.

No corporate title

Despite enjoying the advantages of a corporate entity, a Section 8 company is not referred to as such. It is not obligated to add the suffix "Private Limited" or "Limited" to its name. This exemption is granted to draw attention to the company's mission rather than its structure, preventing misconceptions that it is a for-profit organization.


Documents required for formation of Charitable Company


Photograph

Latest Passport size photograph of Shareholders and Directors

PAN Card

PAN Card of shareholders and Directors.

Foreign nationals must provide a valid passport.

Identity Proof

Voter ID/ Passport/ Driving License of Shareholders and Directors

Address Proof

Telephone Bill /Electricity Bill/ Latest Bank Account Statement of Shareholders and Directors

Business Address Proof

Electricity Bill/ Telephone Bill of the registered office address in India

NOC from owner

No Objection Certificate to be obtained from the owner(s) of registered office

Rent Agreement

Rent Agreement of the registered office should be provided, if any

Statement of Income & Expenditure

Estimated Statement of Income & Expenditure for next three years


Register a company in 3 easy steps

1. Answer Quick Questions
  • Fill in our questionnaires that take less than 10 minutes
  • Provide basic details & documents required for registration
  • Make payment through secured payment gateways
2. Experts are Here to Help
  • Assigned Relationship Manager .
  • Procurement of Digital Signatures (DSC)
  • Application for Name Reservation
  • Documents drafting including MOA and AOA
  • Application to grant license u/s 8
  • Certificate of Incorporation
3. Your Company is Registered
  • All it takes is 12 – 15 working days*
*Subject to Government processing time

Section 8 company registration procedure

Day 1
  • Application for Digital Signature Certificate
Day 2 - 4
  • Checking Name availability
  • Application for Name Reservation under “RUN“
  • Reservation of Name
Day 5 - 8
  • Drafting of MoA, AoA & other required documents
  • Payment of Stamp Duty
  • Notarization of required documents
Day 9 - 13
  • Application to grant a license in form INC-12
  • Government processing time for approval
  • License under section 8 in form INC-16
Day 14 - 16
  • Filing application for company registration
  • Application for DIN Allotment
  • Application for PAN and TAN of company
Day 17 - 19
  • Government processing time
  • Certificate of Incorporation
Private Limited Company One Person Company Limited Liability Partnership Partnership Firm Proprietorship Firm
Applicable Law Companies Act, 2013 Companies Act, 2013 Limited Liability Partnership Act, 2008 Indian Partnership Act, 1932 No specified Act
Registration Mandatory Mandatory Mandatory Optional No
PLC must be registered with MCA under the Companies Act Same as Private Limited Company LLP must be registered with MCA under the LLP Act Partnerships can be registerd or Unregistered, there are obvious benefits to register with the State ROF No registration required. Registration under MSME or GST act are considered valid for Proprietor Firms
Number of Owners 2 – 200 Only 1 2 – Unlimited 2 – 50 Only 1
Minimum of 2 to maximum of 200 shareholders excluding present or former employees who are members Only one shareholder Minimum 2 Designated Partners are required. No limit on the number of maximum partners Minimum 2 partners, and maximum 50 partners The proprietor can be the only owner of the firm
Separate Legal Entity Yes Yes Yes No No
PLC is a separate legal entity, and can enter into contracts or own assets in it’s own name Same as Private Limited Comapany Same as Private Limited Comapany Partnership firm does not have any separate identity from its partners Proprietor and business are the same, and hold same PAN number
Liability Protection Limited Limited Limited Unlimited Unlimited
Limited to the share capital subscribed (may vary if defined as limited by guarantee or unlimited liability in the MOA) Same as Private Limited Company Limited to the capital contribution agreed by the partner in the LLP Agreement Partners are jointly and severally liable to pay the debts of the Partnership Firm Paying off the liabilities of the firm is the proprietor’s responsibility
Statutory Audit Mandatory Mandatory Based On Applicability Not Mandatory Not Mandatory
Required to appoint a statutory auditor within 30 days of company incorporation Same as Private Limited Company Statutory audit required when turnover exceeds INR 40 Lac or contribution exceeds INR 25 Lac No statutory audit required. Tax audit applicable on basis of total turnover Same as Partnership Firm
Ownership Transferability Yes Yes (Restricted) Yes Yes (Restricted) No
Shares are easily transferable, so it makes it a most preferred option for raising capital through external investors There is only one owner in OPC. 100% shares need to be tranferred to change ownership Ownership can be changed with consent of other partners, by drafting a supplementary agreement Ownership is not easily transferable. Partnership deed outlines the restriction for transfer of ownership Ownership of the proprietorship is not transferable
Perpetual Existence Yes Yes Yes No No
Private Company prevails with change in ownership or management OPC has a perpetual succession, but can only have one owner at any time Change in Partners or Designated Partners does not affect the existence of an LLP Change in partner leads to dissolution or formation of another partnership firm Death or insolvency of proprietor dissolves the business
Foreign Ownership Allowed Not Allowed Allowed Allowed Not Allowed
Foreign nationals can invest as per RBI and FEMA guidelines, usually under the Automatic Route Member, nominee and director must be an Indian resident Foreign nationals can invest as per RBI and FEMA guidelines, usually under the Automatic Route Nnon Resident Indian (NRI) can be a partner in the Partnership Firm, subject to RBI regulations Foreign Nationals cannot own proprietorship business in India
Taxability Moderate Moderate High High Low
Lower rate of 25% for companies with gross turnover of INR 400 Crore. Additional dividend distribution tax may apply Same as Private Limited Company Tax rate of 30% on business profits, tax benefits to partners on profit distribution is high Same as LLP Tax rates for individuals apply to Proprietorship Firm, as per the Income Tax slab
Compliance Requirement High High Moderate Low Low
Private company has the highest compliance requirements, both annual and event based OPC compliance requirements are similar to PLC, except conducting an Annual General Meeting (AGM) Annual filing and few event based filings are necessary, but lesser compliance requirements as compared to company structure ITR of partnership needs to be filed annually, no major compliance requirements otherwise No requirement to file a separate ITR. Very less to no compliance hassle

Section 8 Company Registration

Frequently Asked Questions


To register such company, the promoters have to ensure the following:
  1. The main object of the company must be to operate for a charitable purpose and among those prescribed in law
  2. Minimum 2 members of the company, who shall subscribe to capital on incorporations
  3. Minimum 2 directors in the company, one of which must be Indian citizen and resident
  4. The registered office of the company must be situated in India

There is no minimum amount of capital prescribed for the charitable company. The promoters may introduce the amount sufficient to start and run business.

The name of the company should be formulated as per the naming guidelines. The application for reservation of name is made in web-form called “RUN” with a maximum of 2 unique names. The registrar may ask to re-submit the application with a different name if the names do not fulfill the requirements.

The promoters shall apply in e-form INC-12 for said approval from Central Government. The form is accompanied with MoA – AoA of the company, declarations from promoters, estimated statement of income & expenditure for next three years, etc. If the application is approved, the approval letter is issued in form INC-16.

No. The registration process is completely online, the physical presence of the promoters is not required. All the documents and details can be transmitted through the mail or uploaded on our portal. .

Yes, an NRI or Foreign National can be a Director in a Section 8 Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be an Indian citizen and a resident.

The Section 8 company is popularly known as NGO. However, NGOs can be registered as other business structure like trust, society, etc.

A Section 8 or Charitable Company shall not pay any dividend to its members, but apply the surplus of receipts over payments for the promotion of its objectives.

Once the company is incorporated, it is in existence and active as long as the annual compliances are met with regularly or it is wound-up voluntarily.

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