Section 8 Company Registration by Sigma Solutions

Introduction

In 2024, a team of passionate social entrepreneurs set out to create an NGO focusing on education, skill development, and youth empowerment for underprivileged communities. For credibility, fundraising potential, and legal tax benefits, they chose to register as a Section 8 Company under the Companies Act, 2013.

However, they encountered complex legal hurdles, extensive documentation requirements, and compliance uncertainties. To ensure a smooth and legally sound process, they engaged Sigma Solutions—a trusted partner for NGO registration and compliance services.

Challenges Faced by the Founders

1. Lack of Understanding of Section 8 Company Framework

Unaware of:
- Benefits such as limited liability, tax exemptions, and credibility enhancement
- Differences between Trust, Society, and Section 8 Company structures

2. Complex Documentation & Compliance Requirements

Struggled to prepare:
- MoA (Memorandum of Association)
- AoA (Articles of Association)
- Director Identification Numbers (DINs)
- Compliant documentation under MCA guidelines

3. Ministry of Corporate Affairs (MCA) Approval Process

Unfamiliar with:
- Filing the SPICe+ Form for incorporation
- Coordinating for license issuance under Section 8 from ROC

4. Tax Exemption for Funding Eligibility

Needed:
- Guidance on obtaining 80G and 12A certificates for donors’ tax exemption
- Structuring the organization to access CSR funding and government grants

5. Post-Registration Compliance & Annual Reporting

Confused about:
- Mandatory annual filings (e.g., Form AOC-4, MGT-7)
- Conducting board meetings, statutory audits, and operational reporting

Solution Provided by Sigma Solutions

Sigma Solutions delivered an end-to-end Section 8 Company registration service, ensuring legal incorporation, compliance setup, tax exemption acquisition, and funding readiness.

Implementation Process

1. Legal Consultation & NGO Structuring

Explained:
- Differences between Trust, Society, and Section 8 Company models
- Advantages like higher donor trust, international funding eligibility, and structured governance
Helped define:
- Vision, mission, and non-profit objectives aligned with MCA-approved purposes

2. Documentation & MCA Application Filing

Assisted in:
- Procuring Digital Signature Certificates (DSCs) for directors
- Obtaining Director Identification Numbers (DINs)
Drafted and filed:
- SPICe+ Form (Simplified Proforma for Incorporating Company Electronically)
- MoA and AoA clearly stating the educational and social objectives
Included:
- Necessary declarations, affidavits, and compliance statements

3. Approval & Licensing Process

Coordinated with:
- Registrar of Companies (ROC)
- Ministry of Corporate Affairs (MCA)
Secured:
- Section 8 License approval
- Certificate of Incorporation for legal recognition

4. Tax Exemption Registration

Filed applications for:
- 12A Registration (Income Tax exemption for NGOs)
- 80G Certification (allowing donors to claim tax benefits)
Ensured:
- Proper accounting setup to meet Income Tax Department’s reporting norms
Initiated:
- GST registration for operational and service-related compliance

5. Post-Registration Compliance Roadmap

Provided advisory on:
- Annual filings with ROC and Income Tax authorities
- Board meeting conduct, statutory audits, and FCRA readiness for future foreign funding
Assisted in applying for:
- NITI Aayog Registration to access government-funded programs
- CSR partnership building with corporate entities

Results Achieved

Outcome	Details
Section 8 Company Registered in 20 Days	Certificate of Incorporation received from MCA
80G & 12A Tax Exemptions Approved	Eligible for tax-exempt donations and CSR funding
Full Legal Compliance Setup	Annual filings, GST compliance, and board structure in place
Boosted Donor Credibility	Opened access to larger grants, institutional donors, and private CSR funding
Ready for Scalable Impact	Legal foundation secured for national and international projects

Conclusion & Key Takeaways

Registering a Section 8 Company provides maximum credibility, tax efficiency, and funding eligibility for non-profit organizations in India. However, the registration process demands precise documentation, regulatory navigation, and compliance structuring.

Sigma Solutions provided seamless incorporation support, empowering the NGO to: