Section 8 Company Eligibility, Permitted Objects and Requirements (2026 Guide)
Any person or association of persons can form a Section 8 company to promote objects like education, charity, science, sports, social welfare or environment protection, with no dividend to members and no minimum capital. In practice you need at least two members and two directors (more for a public-type company). Shunya's professional fee is ₹1,999.
Who is eligible to form a Section 8 company?
Any person or association of persons who wants to promote a charitable or non-profit object can form a Section 8 company. You do not need to be an existing charity, and there is no minimum capital to start.
Take Imran, a physiotherapist in Kochi who wants to set up a rehabilitation trust for accident survivors with two colleagues. He wonders if the structure is only for big NGOs. It is not. Three individuals with a clear objective and honest documents can qualify.
Two eligibility points are worth knowing early. Members can be individuals or firms, but directors must be individuals; a company cannot sit on the board of a Section 8 company. And a Section 8 company needs more than one member, so a One Person Company cannot be one and cannot be converted into one.
The Section 8 registration page lists what Shunya prepares. This guide explains the rules behind the eligibility so you can judge whether your plan fits.
Which objects are permitted for a Section 8 company?
A Section 8 company can be formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment, or any other object of general public utility. That list is in the Companies Act 2013 and is the same wording used in the licence application.
The word that matters is "specific". An objects clause that says only "promoting education and social welfare" is commonly reported as a reason for objections. A stronger clause names who you serve and how, for example running evening classes for children in a named district, or providing physiotherapy at subsidised cost.
The licence also requires that your income and profits be applied solely to promote the objects. You can carry on incidental business if the MOA permits it and every rupee of surplus goes back into the objects. If your plan is mainly to make money and share it, this structure is the wrong fit; look at a Private Limited company instead.
What are the Section 8 company requirements at a glance?
A Section 8 company has requirements on members, directors, capital, name and profit use. This table lists them with how firm each point is, as of September 2026.
| Requirement | What applies | Note |
|---|---|---|
| Objects | Charitable or non-profit objects from the permitted list. | Must be specific in the MOA. |
| Dividend | No dividend to members in any form. | All income is applied to the objects. |
| Minimum capital | None. | Can be set up with no share capital. |
| Members | More than one; in practice at least two for a private-type company and seven for a public-type one. | Your CA confirms the number for your structure. |
| Directors | Individuals only; in practice at least two for a private-type company and three for a public-type one. | Statutory exemptions exist; practice on the MCA form is as stated. |
| Resident director | Generally at least one director resident in India (182 days or more in the previous year). | Your CA confirms for your board. |
| Licence | Required from the Registrar of Companies. | Applied for with SPICe+. |
| Audit | Statutory audit every year, whatever the turnover. | See annual compliance guide. |
The director and member minimums are written generally on purpose. The Companies Act sets them, a government notification exempts Section 8 entities from some director-count rules, and the MCA form in practice still follows the two-and-three pattern. Your CA will confirm the exact number for your case.
Share your objects on a free callback and a CA tells you if the structure fits.
Start Section 8 registration →What are the rules for a Section 8 company name?
A Section 8 company name must be unique, must not resemble an existing company or trademark, and should carry a word that signals a non-profit, such as Foundation, Forum, Association, Federation, Chambers, Confederation or Council. Once the licence is granted, the company may drop "Limited" or "Private Limited" from its name.
Avoid words that imply government backing, and avoid names close to a well-known brand. Names are reserved through SPICe+ Part A and held for a limited period, commonly reported as 20 days, so do not reserve the name until your MOA is nearly ready.
A practical tip: pick three name options in order of preference, and check for similar names on the MCA portal and in the trademark register before you commit. If your name is rejected, you lose days. You can see how this fits into the wider flow in our process and timeline guide.
What can a Section 8 company do with its income?
A Section 8 company must apply all its income and profit only to its objects and cannot pay a dividend to members in any form. That does not mean it cannot pay anyone.
- Salaries and fees: reasonable payments for actual services are allowed. Director remuneration is permitted if it is reasonable, provided for in the AOA and approved by the Board.
- Incidental business: allowed only if the MOA authorises it, with all surplus reapplied to the objects.
- Preference shares and buy-back: not practically available in this structure.
- Shares in demat: a Section 8 company with share capital must hold shares in dematerialised form; companies without share capital are exempt.
If profit distribution is central to your plan, you have chosen the wrong structure. Compare it with an OPC or a Private Limited company, or see the Section 8 vs Trust vs Society guide if you are choosing between non-profit forms.
What if a Section 8 company does not fit your plan?
If a Section 8 company does not fit, the right alternative depends on whether you want to distribute profit, accept member deposits, or keep a lighter structure. Being honest about this early saves fees.
- You want to share profit: use a Private Limited company or an LLP.
- You want to lend to and take deposits from members: look at a Nidhi company.
- You want a lighter-touch charity: a Trust or Society may have lighter state-level filings, though it generally lacks the same corporate structure. See the comparison.
- You want a company for farmers or producers: see Producer Company registration.
Note that a Section 8 company can also act as CSR implementing agencies, but they need separate CSR registration. Foreign donations need FCRA registration or prior permission; see FCRA registration.
Are you ready to register? A checklist
You are ready to register a Section 8 company when you can answer yes to the questions below. If you cannot, use the free callback to sort them out with a CA.
- Do you have a clear, specific objects statement that fits the permitted list?
- Do you accept that no dividend or profit share goes to members?
- Do you have at least two individuals willing to be directors, at least one resident in India?
- Have you decided between a no-share-capital and a share-capital structure?
- Do you have three name options with the right non-profit words?
- Do you have a registered office address and owner's consent if needed?
- Can you estimate income and spending for the first three years?
Shunya's professional fee is ₹1,999. It excludes the DSC issuer's charge, government fees and stamp duty, which are billed separately, and your CA walks you through them on your callback. A pending Corporate Laws (Amendment) Bill proposes general Companies Act changes but is not yet law as of September 2026. Read the cost guide next.
Who can form a Section 8 company?
Any person or association of persons who proposes to promote a permitted object such as education, charity, science, sports, social welfare, religion or environment protection can form one. Members may be individuals or firms, but directors must be individuals.
How many directors and members does a Section 8 company need?
In practice at least two members and two directors for a private-type company, and seven members and three directors for a public-type company. Statutory exemptions exist, so your CA confirms the exact numbers for your structure before filing.
Is there a minimum capital for a Section 8 company?
No. There is no minimum capital requirement, and a Section 8 company can be set up with no share capital at all. That makes it accessible to small non-profits that have no capital to put in.
Can a Section 8 company pay salaries or profit to members?
It cannot pay dividends to members in any form, but it can pay reasonable remuneration for actual services if the AOA provides for it and the Board approves. All surplus must be applied to the company's objects.
Can a One Person Company become a Section 8 company?
No. A Section 8 company needs more than one member, and an OPC cannot be converted into one. If you are a solo founder, consider adding members before applying, or choose a different structure.
Can a Section 8 company drop Limited from its name?
Yes. Once the licence is granted, a Section 8 company may omit Limited or Private Limited from its name. The name should still carry a non-profit word such as Foundation, Forum, Association or Council, and must not resemble an existing name.
This article is for general information only. For your specific situation, consult a practicing CA.
Ready to register your Section 8?
Request a free callback or pay the ₹1,999 professional fee online and a CA starts your filing. Government fees and other statutory costs are billed separately at actual cost.
Professional fee ₹1,999. Government fees, statutory costs and any third-party charges are billed separately; your CA walks you through them on your callback.