Section 8 company, trust or society?
- Section 8 company: regulated by MCA under the Companies Act, with at least two members and two directors, annual ROC filings and an audit. Preferred by CSR donors and institutional funders.
- Trust: created by a trust deed registered with the sub-registrar. Simpler to run, with fewer governance checks.
- Society: registered under the Telangana Societies Registration Act, 2001 with at least seven members. Suited to member-driven associations.
Registration steps
- Name reservation through SPICe+ Part A.
- MoA and AoA in the Section 8 format, with objects such as education, charity, social welfare, research, sports, art or protection of the environment.
- Licence and incorporation in one SPICe+ application, with declarations and projected income and expenditure for three years.
- PAN, TAN and a bank account after incorporation.
Registrations that unlock funding
- 12A and 80G (and their equivalents under the Income-tax Act, 2025): exemption on the organisation's income, and a tax deduction for donors.
- CSR-1 with MCA, needed to receive CSR funds as an implementing agency. It requires 12A and 80G first.
- NGO Darpan with NITI Aayog, needed for many government grants.
- FCRA registration to receive foreign contributions, generally after three years of activity; newer organisations apply for prior permission.
Questions we are asked
Can a Section 8 company pay its directors?
It can pay reasonable remuneration for services actually rendered, but it cannot distribute profits or dividends to its members.
Can a Section 8 company be converted into a regular company later?
Only with Central Government approval and on conditions, including how accumulated funds are dealt with. Choose the structure with that in mind.