Section 8 Company Registration in India

A company is referred to as Section 8 Company when it registered as a Non-Profit Organization (NPO) i.e. when it has motive of promoting arts, commerce, education, charity, protection of environment, sports, science, research, social welfare, religion and intends to use its profits (if any) or other income for promoting these objectives.

The income of NPO cannot be used for paying out dividends to the company’s members and has to be for the promotion of charitable objectives. Such companies obtain an incorporation certificate from the Central Government and are liable to adhere to the rules specified by the government.

Its manner of carrying out the operation is similar to any other limited company and even the right & duties of a limited company and NPO are alike. However, the title of “Section 8” and “Limited” cannot be interchanged.

However, this Company is similar to a Trust or Society; an exception is that a Section 8 Company is registered under the “Ministry of Corporate Affairs (MCA)” of the Central Government while the Societies and Trusts are registered under the regulations of the State Government. However, this has numerous advantages as compared to Trust or Society and also has better credibility among donors, departments of government, and other stakeholders. Further, the key feature of this type of Company is that it is possible to incorporate the company name without using the word “Limited” or “Private Limited” as the case may be. In case of incorporation of Section 8 Company as a public limited company there should be minimum three directors and two directors in case of incorporation as a Private Limited Company. The maximum number of members in case of a private limited company can be 200. Further for a public limited company, there is no such limit.

According to the rules, failure to comply with the responsibilities stated by the Central Government may lead to the winding up of the company on the orders of government. Besides, strict legal action will be taken against all the members of the company, if the objectives which are laid down by the company, proves to be bogus.

Any company that contravenes provisions of Section 8 is punishable with a fine ranging from ₹10 lakhs to ₹1 crore. Further, directors and officers of the company are liable to punishment with imprisonment up to 3 years and a fine between ₹25,000 to ₹25 lakhs. Such officers can also face prosecution under stringent provisions of Section 447 (dealing with fraud) if they conduct any affairs with fraudulent motives.

The following criteria must be fulfilled as well for registering a Section 8 Company:

Registration Under: Companies Act, 2013.
License: License to be applied to MCA.
Shareholders: Minimum 2 Shareholders (for Private Limited NGO) and 7 Shareholders (for Public Limited NGO)
Directors: A minimum of two directors is required if the Section 8 company is to be incorporated as a private limited company, and a minimum of three directors in case of incorporation as a public limited company (Directors & Shareholders can be the same person).
Indian Resident: At least 1 director must be a resident of India, i.e., have stayed in India for a total period of not less than 182 days in the previous calendar year [(Section 149(3)].
Subscribers to MoA: If the Company is proposed to be incorporated as a private company or a public company respectively, it’s MoA must have at least 2 or 3 subscribers.
MoA & AoA: Decide about the name to be applied for, objects to be carried by the Company, planned registered office address, number of Directors and promoters, authorized capital, and number of shares to be subscribed by each promoter. They must mention the plan laid-out to meet your social objectives. The ROC (Registrar Of Company) is entitled to ask about it.
Initial Capital: Whatever amount of initial capital has been proposed for the Company, it must get invested in the Company within 2 months.
Property Management: The ownership of the property lies in the name of the Company and it can only be sold as per the rules mentioned under the Companies Act. (Ex: With the consent of the Board of Directors in the form of a resolution).
Dissolution: The Section 8 Company may be wind-up only by following the bye-laws of the society. Upon dissolution and after settling all debts and liabilities, the funds and property of the society are not to be distributed among the members of the company. Instead, the remaining funds and property would be given or transferred to some other Section 8 Company, someone that has a similar object.
Annual Compliance: There must be Annual filing of accounts, statements and returns of the company with the ROC, in order to adhere to the set compliances.
Documents: All the Directors must have their valid DIN (Director’s Identification Number) & DSC (Digital Signature Certificate).

Advantages Under The Company Law To Section 8 Companies

Forming of Section 8 company is an easy process

The Minimum paid-up capital is not required.The funds necessary for carrying the business operations can be brought, later, in the form of donations and/or subscriptions from members and the general public.

No stamp duty is payable on transfer of shares of section 8 company also, if made in demat mode. No stamp duty on the MoA and AoA

Any of the registered partnership firms can be a member in its individual capacity and and obtain Directorship

The Tax deductions benefits u/s 12AA and u/s 80G of Income Tax Act to the donors of the company

It has Greater flexibility and a separate legal entity

More credibility as compared to any other Non-profit organization structure like Trust or Society.

For Section 8 Companies in India, many tax benefits are granted

Requirements of Companies Auditor’s Report Order or CARO do not apply to this type of company.

Section 8 Companies are not required to add the suffix Public Limited or Private Limited at the end of their name.

Objectives for Section 8 Company

When the company intends to promote science, commerce, education, art, sports, research, religion, charity, social welfare, protection of the environment or alike other objectives

When the company holds an intention to invest all the profits(if any) or any other income generated after incorporation in the promotion of such objects only; Being an NPO or a Non-profit Organization does not mean that the company cannot make a profit or income. It only signifies that the company can earn income but the promoters are not to benefit from those profits.

when the company does not intend to pay any dividend to its members.

Benefits of Section 8 Companies

80G Certificate for Section 8 Companies

80G is a certificate that exempts a person - making a donation to a Section 8 company from part or fully paying taxes on the donation amount. There is, however, a maximum allowable deduction criterion. The criterion is if the aggregate of the amount you donate exceeds 10% of the total gross income, then the excess amount will not qualify for tax benefit. 80G certificates made its way into law book in the year 1967-68, and it continues to be an important tax-saving mechanism for millions of taxpayers in India. If a section 8 company gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income. The Company has to apply in Form10G to the Commissioner of Income Tax for such registration. Normally this approval is granted for 2-3 years but can be granted earlier depending upon the situations.

12A Registration for Section 8 Companies

12A registration is a one-time registration obtained by most Trusts, right after incorporation to be exempted from paying income tax. Section 8 Company, Trusts and NGOs having 12A registration enjoy exemption from paying income tax on the surplus income of the Trust or NGO. Income tax exemption is available for all non-profit NGOs. Hence, it is important for all Trusts, NGOs and other Not-for-Profit organizations to be aware of Section 12A of Income Tax Act and obtain the same, soon after incorporation of the Trust or NGO.

FCRA (Foreign Contribution Regulation Act) Registration for Section 8 Companies

Organizations seeking foreign contributions for definite cultural, social, economic, educational or religious programmes may obtain FCRA registration or receive foreign contribution through “prior permission” route. It is preferable for an FCRA applicant to be a Trust or Society or a Section 8 Company. The not-for-profit entity must have also been in existence for a minimum of three years while making the FCRA application. It should also not have received any foreign contribution prior to that without the Government’s approval. Additionally, the entity seeking registration should have spent at least ₹10,00,000/- over the last three years on its aims and objects, excluding administrative expenditure. Statements of Income & Expenditure, duly audited by Chartered Accountant, for last three years are to be submitted to substantiate that it meets the financial parameter.

The minimum requirements for Section-8 Company-

There must be Minimum of two shareholders
There must be Minimum of two Directors (Directors and shareholders can be the same person);

At least one of the Director shall be the resident in India;
There is No requirement of Minimum capital

The requirement of a mandatory annual audit

Contravention with provisions of section 8 is punishable

Members of the company cannot get any dividend

Officers and directors do not get benefits and allowances

Can only use the profits for furthering charitable aims and objectives

Amendment of memorandum and articles requires Central Government's permission

The license is revocable on several grounds

Various Forms & Their Uses

S.No	Form Number	Purpose
1	Form No. INC.12	Application for Incorporation of a Section 8 Company has to be submitted along with other documents to the Registrar of Companies to apply for the issuance of License to operate as a Section 8 Company. (which is now merged with spice Form Part B)
2	Form no. INC – 13	Company’s Draft Memorandum of Association (MOA) and Articles of association (AOA) in Form No. INC – 13 (as specified in Act) along with the affixation of subscribers’ photographs.
3	Form no. INC-14	A Declaration is to be affixed in Form no. INC-14 that the draft MOA & AOA are compliant with the provisions & norms of section 8 and the requirements as per Section 8 have been duly taken care of. The declaration has to be made on stamp paper & should be notarized by an Advocate, a Company Secretary, a Chartered Accountant or a Cost Accountant, practising the profession.
4	Form no. INC-15	A declaration in Form no. INC-15 on stamp paper & notarized by each member of the company who is applying.
5	Form no. INC-9	Form no. INC-9 form first directors as well as each subscriber, on the relevant State’s stamp paper and appropriately notarized. An estimation of the company’s future annual income and expenditure for the next three years, mentioning the sources of the income and the purpose of the expenditure.
6	Form no. INC-1	To apply with the ROC for Name Approval.
7	Form no. INC-7	Application for Incorporation of Company
8	Form no. INC-8	Declaration to Apply for PAN & TAN
9	Form no. INC-16	License to incorporate as Section 8 company (New) and INC-17 for existing company (Conversion of A Company into Section 8 Co.) - (which was given by the Central Government when Form No. INC-12 used to get approval)
10	Form no. INC-22	Situation of Registered Office
11	Form no. DIR 2	Consent of Directors to act on behalf of the Company
12	Form no. DIR 3	Application to ROC to get DIN
13	Form no. DIR 12	Appointment of Directors

Incorporation of Section 8 Companies as Per Companies Act 2013

The new rule has made license and registration process for Section 8 Companies easy. Now applicants can apply for the registration of Section 8 Companies via filling a single application in Form SPICe.MCA website has provided the following instructions that will clear the air of doubt:

Pending Form INC-12 SRNs for new Companies pending on the part of respective RoCs will be considered as ‘Rejected’ on 15th August 2019. Such applicants can directly file SPICe for the purpose of receiving License Number and for forming Section 8 Companies.
Shareholders who already owns a license number and are waiting to file SPICe form so that they can incorporate Section 8 Companies should note that the forms shall be processed once the certain time lag is allowed for work flow changes to take effect.
Those shareholders who are done with the filling of SPICe forms but are pending on the part of CRC may have to wait for the processing of these forms once the work flow change comes into action.

Documents Requirement for the Registration of Section 8 Company

Copy of the Rental agreement

PAN Card of all the Members

Aadhaar Card of all the Members

Latest Bank Statement of all the Members and the Company

Telephone Bill/Electricity Bill (not more than 2 months older)

Voter ID

Passport

Driving license

Passport size photograph of all the members

Eligibility Criteria for Section 8 Company Registration

A Person or HUF or limited Company is qualified to start a Section- 8 company registration inside India.
Two or more person who will act as a shareholder or director of the Company should fulfill all the conditions of the Section 8 Company registration.
At least one of the directors shall be a resident of India.
The intention should be the advancement of sports, social welfare, the progress of science and art, education and financial support to lower-income societies.
The surplus created must be used for reaching the principal purpose of section 8 company solely.
Any of the members of the Company cannot draw any compensation in any form of cash or kind.
No profit should be shared among the members and director of the Association directly or indirectly
The Company should have a distinct vision and outline plan for the next three years.
Property Management: The ownership of the property lies in the name of the Company, and it can only be sold as per the rules mentioned under the Companies Act. (Ex: With the consent of the Board of Directors in the form of a resolution).
Yearly filing of accounts, reports and the returns of the Association with the ROC is required to meet the compliance required.

All the Administrators must have their valid DIN (Director’s Identification Number) & DSC (Digital Signature Certificate)

Donations/Funding of Section 8 Company

Section 8 Company is not allowed to raise capitals by way of deposits but they can accept donations from the general public. Below are some of the ways by which it can raise funding:

Foreign Donations: Foreign donations are allowed only when FCRA (Foreign Contribution Regulation Act 1976) registration has been done. FCRA license can only be applied after 3-years from the date of registration. However, if some really urgent foreign donations are necessary, then you may apply for a prior permission from the commissioner.
Equity Funding: Section 8 Company can also raise funds by issuing new equity shares at a higher value.
Domestic donations: There is no limitation to the domestic donations. But to avoid money laundering cases, a proper system must be laid down to keep them in check.

Section-8 Company Incorporation Process

➡ ➡

Obtain a DSC of at least one director to sign the E-forms related to incorporation. File Form DIR-3 with the ROC for getting a DIN application you will require identity Proof and Address Proof. Once the DIR-3 is approved, ROC will allot a DIN to the proposed directors.

➡ ➡

Draft MOA and AOA- Use Form INC-13 to file MOA of a Section 8 Company, also, there is no prescribed format is mentioned for AOA of a Section 8 Company.Each subscriber has to sign the memorandum and article of association who shall also needs to provide his name, address, description, and occupation, if any, in the presence of minimum one witness who will affirm the signature

➡ ➡

File Form RUN for reservation/availability of company name. We can’t directly go through the spice form for incorporation of section 8 company. Applicant can give one name at a time and can perform only one resubmission in the RUN form.It is necessary for Section 8 Company to have words like Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral Trust, in its name.Name will be valid for 20 days from the date of approval by CRC. No requirement to use a Digital Signature Certificate (DSC) during name reservation.

Number of Directors in a Section 8 Company

There is no minimum or maximum prescription for section 8 company.
The second proviso to section 149(1)– prescribes a woman director in a specified class of companies.
Directorship in Section 8 Companies will not be summed up when the total number of directorships will be calculated i.e. it will not be counting while adhering to the maximum limit of twenty Directorship as prescribed in the Act, Section 165 of the Companies Act, 2013.
Section 8 Companies are not under obligation to appoint an independent director and are free from all the consequential provisions concerned with Independent directors.
A minimum of one Resident Director i.e. a director who has resided in India at least for a total period of 182 days (one hundred and eighty-two days) or more within the previous calendar year.

CSR Committee

The CSR committee of the Board must induct the entire process by expressing a CSR Policy enlisting the exercises to be pursued by the company. It should make a reference to the Board on the determined budget for the research of events. Based on the recommendations, the Board will approve the expenditure on each activity stated in the CSR Policy. The CSR organization is vested with the liability of supervising and controlling the implementation of CSR Policy. The funds allocated for the projects must be entirely spent on the declared goal

CSR Activities

The CSR committee is entitled to make a reference to the Board on the exercises to be pursued under CSR based on which, the Board will conclude the CSR strategy. Some of the principal aspects of accompanying CSR activities are as follows:

The CSR project should not add the daily chores of business.
The Business (Corporate Social Responsibility Policy) Laws, 2014, allows an arrangement to undertake CSR activities through a certified trust/ certified society/ Section 8 Company.
The CSR organization must set-up a monitoring and recording system for the utilization of reserves for the CSR exercises.
The company is also given with an opportunity of collaborating with other companies in a way which helps the CSR committees of the several companies to report independently on such projects or programs.
CSR movements of an Indian actuality must only be conducted inside India.

CSR Expenditure

Bills spent outside of India on projects as per CSR Policy will not be a component of CSR investment.
Costs incurred on worker benefit will be not be regarded as CSR investment.
Investment acquired by the company on making CSR capacities of their employees, and employees of performing agencies with a track record of three years, including spending on administrative overheads will be deemed to be CSR expenditure, subject to the satisfaction of certain conditions.
Expenses incurred on payment to political parties will not fall under the ambit of CSR expenditure.
One-off events like marathons, awards, charitable contribution, advertisement, sponsorship of television programs etc. wouldn't qualify as CSR expenses.
Remuneration paid to regular CSR staff as well as to volunteers of the company for the performance of CSR activities can be factored into CSR project cost as a part of CSR expenditure.
The expenditure acquired by the foreign holding company for CSR activities in India will qualify as CSR spend of the Indian subsidiary, if the CSR expenditures are routed through Indian subsidiaries and if the Indian subsidiary is required to do so as per the Act.

Annual Compliances for Section 8 Company- Checklist

First Board Meeting

Holding of first Board Meeting of Directors within 30 days of incorporation of company.
Directors can attend the meeting either in person or through video conferencing.
Every director is under obligation to disclose his interest in any company/firm/body corporate/association of individuals
An independent director, if any, must give a declaration taht he meets the criteria of independence during the first board meeting as a director.

Subsequent Board Meeting

As per the exemption notification read with section 173(1) and 174(1), Section 8 companies must have at least one meeting within a period of 6 calendar months and the quorum for its board meetings is 8 directors or 1/4th of its total strength, whichever is less, respectively. However, the quorum should have a minimum of at least two members.

First Annual General Meeting

Within a period of Nine months from the date of closing of the first financial year of the Company.

Subsequent Annual General Meeting MGT-15

Within a period of six months from the date of closing of financial year i.e 30th September
Not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next.

Disclosures of interest by Directors/Declaration

Every Director shall in the first Board meeting of the Board in every financial year disclosure his interest in form MBP-1 and declaration in form DIR-8

Appointment of First Auditor

Appointment of first auditor in Board meeting within 30 days of incorporation

Appointment of Subsequent Auditor

Will be appointed for 5 years in AGM
Within 15 days from the date of appointment in Annual General Meeting

Filing of form ADT-1

Within 15 days from the date of appointment of Auditor

Filing of Financial Statements i.e. form AOC-4

Within 30 days of Annual General Meeting

Filing of Annual Return i.e form MGT-7

Within 60 days of Annual General Meeting

Statutory Audit of Accounts

By a Chartered Accountant

Filing of Income Tax Return of Company ITR-6

30th of September every year

Maintenance of Statutory Registers, Minutes books and records

All the Companies are advised to maintain few statutory registers in the prescribed format such as register of members, register of charges, register of directors and KMP, register of loan and guaratee etc.
Minutes of Board meeting and general meeting, Attendance Register, Books of Accounts etc. are to be maintained

Proof of Circulation of Notice, Draft and signed Minutes

Should be maintained for a period of 3 years from the date of meeting

Directors KYC*

30th of September

E-Form MSME-1

Every Company having outstanding payments dues to micro and small enterprises and in case the payment of the same is pending beyond 45 days, then the Company has to furnish details as per the following timeline:

For April to September by 31st October
For October to March by 30th April

E-Form DPT-3*

All the Company having any outstanding loan/amounts as on 31st March of every finacial year has to furnish details and bifurcation of such outstanding amount irrespective of the fact whether such amount irrespective of the fact whether such amount is falling under the definition of deposit or not by 30th June

Conclusion

In India, NGOs can be registered as Section 8 Company, trust or society. While, Trusts and Societies are registered under State Government regulations, section 8 companies are registered under Ministry of Corporate Affairs.

Forming a section 8 Company is preferred due to following reasons: Improved recognition, better legal standing, higher credibility amongst donors, Government departments and other stakeholders and relaxation from a number of Companies Act Regulations.

Frequently Asked Questions

1. What are the minimum requirements to register a Section-8 Company?
- Minimum 2 Directors shall be appointed, out of which one must be a resident of India.
- Minimum 2 shareholders are required for this registration. Here, an individual may become shareholder and Director at the same time.
- A place of business in India must be provided as a registered office address.
- Use of word Fundation, Association etc. is mandatory in the name of the Company.
2. What are the minimum requirements towards Capital?
- Authorised Capital (Limit up to which company can allot shares) is prescribed as Minimum Rupees One Lakh, however, since the Stamp duty and fee for Authorised Capital up to Ten Lakhs is same, we recommend it to be kept at Ten Lakhs only
- There is no minimum paid-up capital requirement, however, atleast one share subscription each subscriber is a must, we recommend the paid up capital to be kept as One Lakh since initial expenditure and Bank account opening needs that kind of money.
3. Is it necessary to incorporate a new Section 8 Company only?
- No, existing Companies can also get converted provided it meets up the compliance norms.
4. Can Section 8 Company be incorporated both as Private and Public Limited Company?
- Yes, it is the applicant’s choice to incorporate a Section 8 Company as a private or public limited Company after meeting the compliance requirement i.e. 2 Directors and 2 members in case of private Company and 3 Directors and 7 members in case of public Company. However, One Person Company (OPC) cannot be incorporated as a Section 8 Company as per Rule 3 of the Companies (Incorporation) Rules, 2014
5. What is the requirement of DSC (Digital Signature Certificate)?
- DSC is provided in the form of token issued by Certified Authorities and is a substitute of Physical Signature and enable the owner to sign documents digitally
- Company incorporation is a complete online process and all the forms required to be filed for incorporation of company are required to be signed digitally with the help of DSC of the Directors
- Company Sarthi helps its clients in the issuance of DSC
6. What is the requirement of Documents for DSC issuance?
- Self-attested Documents and Details required are:
- On submission of above documents with the DSC Authority partner, applicant will receive the OTP on the given Mobile and e-Mail ID and thereafter applicant has to complete Mobile and Video verification.
7. What is the eligibility to become a Director in Company?
- Any natural person above the age of 18 years can become the director in the company after procuring Director Identification Number (DIN).
- There are no specific criteria provided in terms of citizenship or residency, a foreign national can also become a director.
8. What is Director Identification Number (DIN)?
- DIN is a unique number assigned by the Ministry of Corporate Affairs to Individuals on whose name the application is made, allowing that individual to become a Director in a Company or Designated Partner in an LLP
- DIN is allowed only once in lifetime and can be used to become a Director in any number of company as per eligibility criteria
- The application of DIN Allotment is now merged with the application for the formation of a company subject to a limit of maximum 3 DIN.
9. What is the requirement of Documents for DIN issuance?
- Self-attested Documents and Details required are:
- Proof of Residence of Applicant (Any one not older than 2 months having same address as that in the Proof of Identity):
10. How to reserve the name of the Company?
- Applicant has to give few choices of the name which can be checked at the Company Sarthi for the availability
- On the availability of atleast one name, Company Sarthi inform you of the same and ask you to provide two options of that name and the priority preference
- Company Sarthi also seeks from you the main objects of the company and State in which Registered office will be situated
- Although Company Sarthi follows a rigorous process of checking availability of Name, the registrar may ask to re-submit application with a different name if names applied do not fall under the criteria of uniqueness, relevancy or do not fulfill other requirements.
11. Does any subscriber have to be physically present for completing the process of Incorporation of the Company?
- No, none of the promoters are required to be physically present for completing the process of Incorporation of the Company
- All the forms are filed on the web portal and are digitally signed.
- Also, the required documents can be sent through e-mail or uploaded on our portal for filing.

12. What is the requirement of Documents for DIN issuance?
- Business address Proof (Any one not older than 2 Months)
- No Objection Certificate to be obtained from the owner(s) of registered office.
- Rent Agreement of the registered office should be provided if property is on rent
13. Who can become a member in Section 8 Company?
Any individual/organization can become the member of Section 8 Company including foreigners /NRI’s.
14. Will there be a need for any other special registration required?
In addition to registration, a non-profit engaged in certain activities might also require special license/permission. Some of these include (but are not limited to):
- A place of work in a restricted area (like a tribal area or a border area requires a special permit – the Inner Line Permit – usually issues either by the Ministry of Home Affairs or by the relevant local authority (i.e., district magistrate).
- To open an office and employ people, the NGO should be registered under the Shop and Establishment Act.
- To employ foreign staff, an Indian non-profit needs to be registered as a trust/society/company, have FCRA registration and also obtain a ‘No Objection Certificate’. The intended employee also needs a work visa.
- A foreign non-profit setting up an office in India and wanting staff from abroad needs to be registered as a trust /society /company, needs permission from the Reserve Bank of India and also a ‘No Objection Certificate’ from the Ministry of External Affairs.
15. Who is authorized to issue license to Section 8 Companies?
Registrars of Companies of respective jurisdictions are delegated with the powers of Central government to issue license to Section 8 Companies. [Vide MCA notification dated 21st May, 2014 – Annexure D].
16. Can a Company with unlimited liabilities be registered as a Section 8 Company?
No. Rule 20(1) of the Companies (Incorporation) Rules, 2014 provides that only a limited company registered under this Act or under any previous company law shall make an application to the Registrar for issue of license. Therefore, a company with unlimited liabilities cannot be registered as a Section 8 Company.
17. Is it necessary that Section 8 Companies are to be incorporated as a limited company with share capital?
Section 8 Company may be incorporated as a company limited by shares or by Guarantee (with or without share capital).
18. Can a One Person Company (OPC) be incorporated as or convert into a Section 8 Company?
No. Rule 3 of the Companies (Incorporation) Rules, 2014 prohibits a one person company to be incorporated as section 8 company or to convert into a Section 8 Company.
19. Can a one person company become a member of Section 8 Company?
No, Rule 3(6) of the Companies (Incorporation) Rules, 2014 prohibits one person company to invest in securities of anybody corporate.
20. Whether a foreign Company can be registered as a Section 8 Company in India?
Section 2(42) of the Companies Act, 2013 defines the term “Foreign Company” and means any company or body corporate incorporated outside India which–
- has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
- conducts any business activity in India in any other manner.
Now since a Company or a body corporate incorporated outside India for doing ‘not for profit activities’, opened a branch / liason office in India, cannot fall in definition of a foreign company as business activity is missing.

Therefore, such company cannot be termed as foreign company. However, subject to compliance of FEMA regulations, it can open branch / liason offices. Such ‘not for profit companies’ or ‘bodies corporate’ incorporated outside India can promote and register a Section 8 Company in India as a distinct entity.
21. Whether existing section 25 companies registered under the Companies Act, 1956 are required to obtain license under section 8 of the Companies Act, 2013?
No, the existing section 25 companies are not required to obtain license under Companies Act, 2013.The existing registrations and licenses issued under the 1956 Act, (upon repeal) shall be protected under section 465 of the Companies Act, 2013.