Section 8 Company under the Companies Act, 2013: Charitable Objects, Incorporation and Compliance
Section 8 of the Companies Act, 2013 provides a corporate form for organisations established to promote specified non-profit or charitable objects. A qualifying company applies its profits or other income towards its stated objects and prohibits payment of dividend to its members.
Updated: 16 September 2026
What is a Section 8 company?
A Section 8 company is a limited company licensed under Section 8 of the Companies Act, 2013 for specified objects such as promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or another similar object. The form broadly corresponds to the former Section 25 company under the Companies Act, 1956.
Unlike an ordinary profit-distributing company, its profits and other income must be applied in promoting its objects, and it must intend to prohibit payment of dividend to members. Subject to the licence and the Act, it may be registered without adding the words "Limited" or "Private Limited" to its name.
- The proposed objects must fall within the charitable or other permitted objects described in Section 8.
- Profits or other income must be applied towards promoting those objects.
- Payment of dividend to members must be prohibited.
Objects and legal effect of registration
Section 8 expressly refers to promotion of commerce, art, science, sports, education, research, social welfare, religion, charity and protection of the environment, together with other similar objects. The objects stated in the memorandum should therefore be drafted consistently with the proposed activities and the statutory non-profit character of the company.
Under Section 8(2), a company registered under this section enjoys the privileges and remains subject to the obligations of limited companies. Section 8(3) also permits a firm to be a member of a Section 8 company.
How to incorporate a new Section 8 company
For a new Section 8 company, the MCA incorporation process is integrated with SPICe+. The earlier separate INC-12 route is not used to obtain the licence for incorporation of a new Section 8 company. The application is made through the MCA portal using the applicable SPICe+ incorporation workflow and linked forms.
- Decide the objects and structure: identify the permitted Section 8 objects, subscribers, proposed directors, registered office details and whether the company will be limited by shares or guarantee, as applicable.
- Apply for the proposed name: use SPICe+ Part A as applicable. The proposed name should be consistent with the Section 8 character and the applicable name rules.
- Prepare the memorandum and articles: the memorandum must clearly state the non-profit objects and restrictions required by Section 8. MCA provides the Section 8 e-MOA framework in Form INC-13 for applicable cases.
- Complete SPICe+ Part B and linked forms: provide incorporation, subscriber, director, registered office and other prescribed particulars and declarations.
- Attach the prescribed supporting documents: the exact attachments depend on the facts of the proposed company and the current MCA webform requirements.
- Professional certification and filing: complete digital signatures and professional certification wherever prescribed, pay the applicable fees and stamp duty, and submit through the MCA portal.
- Registration and licence: on approval, the Registrar registers the company under Section 8 and the licence forms part of the statutory incorporation framework.
Practical note: MCA webforms and technical filing requirements are periodically revised. Before filing, verify the current SPICe+ and linked-form instructions on the MCA portal rather than relying on an old form list.
Important documents and information
| Item | Purpose |
|---|---|
| Proposed name and objects | To establish the Section 8 character and permitted activities of the proposed company. |
| Memorandum of Association | Sets out the permitted objects and statutory non-profit restrictions. INC-13 e-MOA applies in cases covered by the MCA webform framework. |
| Articles of Association | Provides the internal governance rules of the company. |
| Subscriber and director particulars | Identity, address, DIN/PAN/passport and related information as required by the applicable webforms. |
| Registered office proof | Evidence of the proposed registered office and related authorisation/NOC where applicable. |
| Declarations and professional certification | Confirm statutory compliance in the form and manner prescribed under the incorporation framework. |
Section 8 of the Companies Act, 2013: key provisions explained
Section 8(1): licence and registration
Where the statutory conditions relating to permitted objects, application of income and prohibition of dividend are satisfied, the Central Government may grant a licence on prescribed conditions permitting registration as a limited company without the usual "Limited" or "Private Limited" suffix.
Section 8(2) and 8(3): status and membership
The company has the privileges and obligations of a limited company. A firm may be a member of a company registered under Section 8.
Section 8(4): alteration and conversion
A Section 8 company cannot alter its memorandum or articles except with the previous approval required under the section. Conversion into another kind of company is permitted only after compliance with the prescribed conditions.
Section 8(5): existing limited company seeking Section 8 status
A limited company already registered under the Companies Act, 2013 or a previous company law may, if it satisfies the required objects and restrictions, obtain a licence and registration under Section 8 in accordance with the prescribed procedure.
Section 8(6) to 8(10): revocation, winding up and amalgamation
The Central Government may revoke the licence if the company contravenes Section 8, breaches licence conditions, conducts its affairs fraudulently, acts in violation of its objects or acts in a manner prejudicial to public interest. A reasonable opportunity of being heard must be given before the revocation order contemplated by Section 8(6).
Where the licence is revoked, further statutory consequences can include conversion of status, winding up or amalgamation in the public interest, subject to the requirements of Section 8. A Section 8 company may amalgamate only with another Section 8 company having similar objects.
On winding up or dissolution, any remaining assets after satisfaction of debts and liabilities are dealt with in the manner specified by Section 8(9), including transfer to another Section 8 company having similar objects subject to Tribunal-imposed conditions, or the statutory alternative provided in that sub-section.
Section 8(11): penalty for non-compliance
Section 8(11) provides monetary penalties for a company that defaults in complying with the requirements of the section and for directors and officers in default. Where the affairs of the company are proved to have been conducted fraudulently, the proviso makes every officer in default liable for action under Section 447, which deals with punishment for fraud.
The current Section 8(11) reflects the 2020 amendment that omitted the earlier imprisonment wording in this sub-section. The company may be fined from Rs. 10 lakh up to Rs. 1 crore, while a director or officer in default may be fined from Rs. 25,000 up to Rs. 25 lakh, without prejudice to other action available under Section 8.
Important compliance points after incorporation
- Use the company's income and property consistently with its memorandum, licence conditions and Section 8 objects.
- Do not distribute dividend to members.
- Maintain statutory registers, books, financial statements and other records required under the Companies Act, 2013 and applicable rules.
- Make annual and event-based filings applicable to the company and comply with governance requirements concerning directors, meetings, accounts and audit, subject to exemptions or modifications lawfully applicable to Section 8 companies.
- Obtain the required approval before altering the memorandum or articles where Section 8 requires previous approval.
- Check separate tax-law requirements if income-tax exemption, registration or donor deduction benefits are intended; incorporation under Section 8 does not by itself grant every tax exemption.
Section 8 company and the former Section 25 company
The Companies Act, 2013 replaced the Companies Act, 1956 framework. Organisations formerly registered under Section 25 of the 1956 Act are commonly referred to in the context of today's Section 8 framework. The present statutory reference for formation of companies with charitable or similar non-profit objects is Section 8 of the Companies Act, 2013.
This article is a general legal-information guide. For an actual incorporation, alteration, conversion or licence matter, the current Act, rules, MCA webforms, notifications and the facts of the company should be checked before filing.