NGO/Section 8 Company

An NGO (Non-Governmental Organization) and a Section 8 Company are both types of nonprofit organizations that work for social welfare and charitable purposes. Here’s a brief explanation of each:

NGO (Non-Governmental Organization):
An NGO is a voluntary organization that operates independently from the government and aims to address various social, environmental, and humanitarian issues. NGOs can work on a wide range of causes, including education, healthcare, poverty alleviation, environmental conservation, human rights, and more. They often rely on funding from donations, grants, and sponsorships to carry out their activities. NGOs play a crucial role in complementing the efforts of governments and other organizations in addressing societal challenges.

Section 8 Company:
A Section 8 Company, as per the Companies Act, 2013 (previously known as Section 25 Company under the Companies Act, 1956), is a specific type of nonprofit organization. Its primary objective is to promote charitable activities, social welfare, scientific research, religion, or any other useful purpose that benefits society. The profits generated by a Section 8 Company are reinvested in its objectives, and its members or shareholders do not receive dividends. This legal structure allows the organization to apply for tax benefits, exemptions, and other advantages available to nonprofit entities.

In summary, both NGOs and Section 8 Companies share the common goal of working for the betterment of society and do not operate for profit-making purposes. The key difference lies in the legal framework and registration process. An NGO is a more general term that encompasses various nonprofit organizations, while a Section 8 Company is a specific legal structure under the Companies Act dedicated to promoting charitable activities and social welfare.

Registration Process

The registration process for an NGO or Section 8 Company in India involves several steps. A Section 8 Company is a type of nonprofit organization that is established for promoting social welfare, charity, religion, education, or any other useful object, and it intends to apply its profits or other income in promoting these objectives. Here’s a general overview of the registration process:

Obtain Digital Signature Certificate (DSC): The first step is to obtain Digital Signature Certificates (DSC) for the proposed directors or authorized representatives. DSC is required for signing electronic documents during the registration process.

Apply for Director Identification Number (DIN): Each proposed director needs to apply for a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).

Name Reservation: Choose a unique name for the NGO or Section 8 Company and apply for name reservation through the RUN (Reserve Unique Name) service on the MCA portal.

Prepare Memorandum and Articles of Association: Draft the Memorandum of Association (MOA) and Articles of Association (AOA) of the proposed NGO or Section 8 Company. The MOA and AOA must comply with the requirements of the Companies Act, 2013.

Incorporation Application: Prepare the incorporation application in the prescribed format (Form SPICe) with the required documents and file it with the Registrar of Companies (ROC).

Registration Fee: Pay the required registration fee as per the prescribed fee schedule based on the authorized capital of the company.

Verification and Approval: The ROC will review the application and documents submitted. If everything is in order and compliant with the regulations, the Registrar will issue the Certificate of Incorporation.

PAN and TAN Application: After receiving the Certificate of Incorporation, apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the newly incorporated NGO/Section 8 Company.

Apply for 80G and 12A Registration (Optional): If the NGO intends to avail tax benefits, it can apply for 80G and 12A registrations with the Income Tax Department.

Bank Account Opening: Open a bank account in the name of the NGO/Section 8 Company and deposit the required minimum capital.

Please note that the registration process for an NGO/Section 8 Company may involve additional steps and documentation depending on the specific requirements of the organization and the state in which it is registered. It is recommended to seek professional advice or assistance from legal experts or chartered accountants to ensure a smooth and compliant registration process.