A Section 8 Company can be formed by almost Any person or association of persons, Indian citizens, Hindu Undivided Families (through their karta), foreign nationals, existing trusts, societies, or companies, can form a Section 8 Company, as long as the purpose is charitable and a few structural conditions under the Companies Act, 2013 are met. This guide explains the eligibility criteria, legal requirements, and who can register a Section 8 Company in 2026.
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Who Is Eligible to Form a Section 8 Company?
The Companies Act, 2013 doesn't restrict eligibility to Indian citizens; any "person or association of persons" can apply if the objects are charitable and structural conditions are met.
- Formed for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, or environmental protection.
- No profits or dividends may be distributed to members — all surplus is reinvested.
- At least one director must be a resident of India (182+ days in the preceding financial year).
- All directors need a Director Identification Number (DIN) from the MCA.
Individuals Who Can Form a Section 8 Company in India
Any adult Indian citizen can be a promoter, director, or member; no citizenship restriction applies beyond the resident-director rule.
- Indian citizens aged 18+ can be directors and/or shareholders.
- Members of a Hindu Undivided Family (HUF) can participate, typically through the karta.
- A person disqualified under Section 164 of the Companies Act cannot be appointed as a director.
- Directors may draw reasonable remuneration for services, but this differs from profit distribution, which stays prohibited.
Organizations and Entities That Can Form a Section 8 Company in India
It isn't only individuals; existing organizations can also become members or promoters of a Section 8 Company.
- Existing Trusts and Societies can become members or convert/restructure into a Section 8 Company.
- Partnership firms, acting through their partners, can be members.
- Other companies (including co-operative societies) registered under Indian law can hold membership.
- Corporate entities and foreign companies can also participate as members, subject to FDI and sectoral rules.
Can Foreign Nationals Form a Section 8 Company in India?
Foreign nationals can form a Section 8 Company, but rules differ depending on whether you're just incorporating or also seeking foreign-funding FCRA registration;
- Foreign nationals can become directors or members, provided the company has at least one resident director in India, as required under the Companies Act, 2013.
- If the company is to receive Foreign Direct Investment (FDI), it is generally incorporated as a company limited by shares, subject to FEMA and RBI regulations.
- Under the FCRA Amendment Rules, 2026, organisations with foreign nationals (other than PIO/OCI cardholders) as key functionaries are generally not eligible for FCRA registration, unless specifically approved by the Central Government.
- This restriction does not prevent incorporation, but it may affect the NGO's ability to receive foreign donations in the future.
- Many non-profits choose a company limited by guarantee structure when they do not require equity investment, as it is well-suited for charitable organisations and avoids issues related to share capital.
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Private vs Public Section 8 Company: Minimum Requirements to Form a Section 8 Company in India?
Whether you register as private or public changes your minimum director and member count; most NGOs choose private for simpler compliance.
| Requirement | Private Section 8 Company | Public Section 8 Company |
| Minimum Directors | 2 | 3 |
| Minimum Members/Shareholders | 2 | 7 |
| Resident Director Required | Yes, at least 1 | Yes, at least 1 |
| Minimum Capital | None mandatory | None mandatory |
| Name Suffix | No "Private Limited"/"Limited", uses Foundation, Forum, Association, Federation, Council, etc. | Same naming rule applies |
| Governing Provision | Section 3(1)(b), Companies Act, 2013 | Section 3(1)(a), Companies Act, 2013 |
Who Cannot Form a Section 8 Company in India?
A few categories are excluded by law from forming a Section 8 company in India; it isn't open to absolutely everyone or every purpose.
- Undischarged insolvents or people convicted of fraud/moral turpitude offenses (Section 164 disqualification).
- Minors cannot be appointed as directors.
- Entities whose primary object is profit-making rather than charitable/social welfare.
- Companies whose objects would let them distribute profits or dividends to members in any form.
- Boards with zero India-resident directors cannot get MCA approval.
Latest Legal Updates You Need to Know (2025–2026)
Eligibility rules haven't changed, but related regulations affecting who can practically run and fund a Section 8 Company have recently changed.
- FCRA Amendment Rules, 2026 restrict foreign nationals (other than PIO/OCI holders) from serving as "key functionaries" in FCRA-registered entities.
- FCRA threshold confirmed at ₹15 lakh: To receive foreign contributions, a Section 8 Company must be 3+ years old and have spent a minimum of ₹15 lakh on core activities in that period; official MHA guidance confirms ₹15 lakh, not the ₹10 lakh some casual guides cite.
- Registration forms updated: From April 1, 2026, the Income-tax Act, 2025 replaced Form 10A/10AB with Form 104 and Form 105 for 12AB tax-exemption applications.
- SPICe+ remains the single-window route, integrating name reservation, DIN, PAN, TAN, and the Section 8 license (Form INC-12) into one filing.
Documents Required to Form a Section 8 Company in India?
Before applying, promoters should have the following documents ready; incomplete documentation is a common cause of delay.
- Identity/address proof of directors/members (PAN, Aadhaar, passport for foreign nationals).
- Digital Signature Certificate (DSC) and DIN for proposed directors.
- Draft MOA and AOA stating charitable objects.
- Declaration in Form INC-14 (from a practicing professional) and Form INC-15 (from each applicant).
- Proof of registered office address.
After your Section 8 Company is incorporated, the next important step is to obtain an NGO Darpan Registration on the NITI Aayog portal. Many government grants, CSR funding opportunities, and registrations require a valid NGO Darpan Unique ID. Learn the complete process in our NGO Darpan Registration Guide
Conclusion
The biggest recent shift isn't in who can incorporate a Section 8 Company, but in who can help it receive foreign funding, following the FCRA Amendment Rules, 2026. Anyone planning international involvement should check both frameworks- Companies Act eligibility and FCRA eligibility- before finalizing their board.
Frequently Asked Questions
Can one person alone form a Section 8 Company?
No. A private Section 8 Company must have at least 2 directors and 2 members. The same individuals can act as both directors and members, but a minimum of two people is required for incorporation.
Can an existing Trust or Society become a member of a Section 8 Company?
Yes. A registered Trust, Society, Section 8 Company, or other eligible legal entity can become a member of a Section 8 Company, subject to the provisions of its constitutional documents
Can foreign nationals become directors of a Section 8 Company?
Yes. Foreign nationals can serve as directors, provided the company has at least one resident director in India. However, organisations with foreign nationals as key functionaries may face additional FCRA eligibility requirements under the FCRA Amendment Rules, 2026.
What is the minimum age to become a director?
A director must be at least 18 years old. Minors cannot be appointed as directors under the Companies Act, 2013.
Can an NRI form a Section 8 Company in India?
Yes. NRIs can incorporate a Section 8 Company and serve as directors or members, provided the company complies with the Companies Act, 2013, including the requirement to appoint at least one resident director in India.
Can a Section 8 Company have only foreign directors?
No. Every Section 8 Company must have at least one director who has stayed in India for at least 182 days during the previous financial year, as required under the Companies Act, 2013
Author
Aabha Garg
A Content Strategist at NGOExperts, who focuses on NGO registration, 12A and 80G registration, FCRA compliance, income tax filing for non-profits, and CSR funding guidelines in India. I research and write our compliance guides in collaboration with our in-house Chartered Accountants and Company Secretaries, so every article reflects current tax and regulatory requirements for the NGO and non-profit sector.
Written by Aabha Garg. Last updated on August 5, 2026
