You can very much  register a company for crowd funding, it all depends on what is the main activity of company as stated in the Article of Association and Memorandum of Association. Contact a CA in you town, he will give you appropriate advice. For further clarification you may contact me through Pathlegal. Hit the like button if the advice is useful to you.   

Crowdfunding is a means to raise a smaller amount of funds from a larger number of peoples mainly via the internet.

crowdfunding in most cases serves as seed fund to get the business started.

Since crowdfunding campaign is intended to attract masses, in case the presentation is not up to the mark, then it could create a negative impact on a large scale too. Thus the damage could be equally large as one would expect the success to be.

crowdfunding is witnessing gradual success and awareness in India. Some of the crowdfunding platforms that exist and are popular in India are:

• Indiegogo
• Wishberry
• Ketto
• Fundlined
• Catapoolt

The Consultation Paper on Crowdfunding in India issued by RBI defines Crowdfunding as “Solicitation of funds from multiple investors through a web-based platform or social networking site for a specific project, business venture or social cause

Presently, raising funds in India by a Company is governed by the provisions of Companies Act,2013, Securities Exchange Board of India Act 1992, Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996.

In India Equity  Crowdfunding is Illegal, but reward crowdfunding is Legal.

l. To issue equity shares in India, companies need to comply with the provisions of The Companies Act,2013. 

In order to regulate Crowdfunding in India it is important that the following are established:

• The investors that are allowed to invest through the crowdfunding platforms, 
• The types of entities that are allowed to raise funds through this channel and the disclosure requirements,
• The types of entities that are allowed to set up internet-based Crowdfunding Platforms to enable online solicitation from such investors, and the different associated aspects

Pure Donation-Based Crowdfunding (where issuers directly seek a donation from the grantors), Reward-Based Crowdfunding (where issuers directly offer rewards like movie tickets, new computer game, download of a book, etc.) and Peer-to-Peer lending do not fall within the regulatory purview of SEBI, as they do not generally involve issuance of securities for financial return, and may require authorization from other regulators.

1. milaap and impactguru charge certain fee for fundraising on their respective platforms

2. that constitutes their income 

3. the funds raised are on behalf of the campaigner who has enrolled in the platform by paying its fee

4. thus these are not completely non-profit organisations like s.8 company or charitable trust or society

5. there is a profit motive involved in the form of collecting the fees for initiating a fundraising campaign on the platform 

6. the persons who donate do not get any 80G certificate for claiming tax deductions as well

7. the funds raised are not to the account of the company but collected on behalf of the campaigner. Thus that is not the income of the company

- As per law, equity-based crowdfunding is illegal in India , whereas peer-to-peer lending is regulated by the RBI.

- Further, community crowdfunding which includes donation based and rewards-based crowdfunding are legal

- Further, crowdfunding websites typically charge a fee for using their platform and services to bring money for the cause.
- Further, it is governed by the Securities & Exchange Board of India

- Further, as per the Income Tax Act, non-profit organizations that raise money using crowdfunding platforms are completely exempted from taxation, and any individual receiving donations on any platform, unless the company is a non-profit itself, is liable to pay income tax.

-  Further, Foreign Contribution (Regulation) Act, 2010 (FCRA) and the Foreign Exchange Management Act, 1999 (FEMA) are applied to all types of crowdfunding.

Private lts company can't take donation from public. For seeking donation from public you need a society, trust and permission from charity commissioner

Yes, a private ltd. company can start crowdfunding website. You just have to charge fees (fixed fee or/and some % age of total donations) for using your web based platform from individual or company/organization seeking donations through your website. So, your revenue would be from fees and not donations and such kind of funding mostly falls outside the purview of securities market regulator and are allowed for a private limited company. You just need to consult a CA/ tax practitioner regarding tax implications and then you are good to go.

Also just be careful that you don't accept donations "in your company's name" as there will be a lot of legal hassles as yours is a private limited company and private limited companies are strictly prohibited from accepting public deposits, as such.

Hope this satisfies your query !

Dear sir/ma'am,

The Consultation Paper on Crowdfunding in India issued by RBI defines Crowdfunding as “Solicitation of funds from multiple investors through a web-based platform or social networking site for a specific project, business venture or social cause

Crowdfunding is predicted to be one of the biggest financial changes in history. Commentators are of the opinion that it would revolutionize the way money is exchanged in India. If regulated appropriately, crowdfunding can provide an excellent funding alternative for early-stage startups and ventures.

The legality of crowdfunding in India: In India Equity Crowdfunding is Illegal. To issue equity shares in India, companies need to comply with the provisions of The Companies Act,2013.  The types of entities that are allowed to set up internet-based Crowdfunding Platforms to enable online solicitation from such investors, and the different associated aspects.

Tax Implications in crowdfunding: According to the income tax regulations, any donation made above Rs 2000 in cash is not eligible for deductions, which has prompted web-based platforms to integrate online means to solicit funds.

Is Crowdfunding legal in India?

Equity Crowdfunding is illegal in India, Donation-based, and reward crowdfunding is 

Legal.

The Securities And Exchange Board of India has Issued laws On digital equity crowdfunding in India  as “unauthorized, unregulated, and illegal”

In 2016  SEBI pronounced over half a dozen digital equity crowdfunding platforms (ECP), including prominent ones like Grex, LetsVenture, TermSheet, Equity Crest, and Tracxn, as unauthorized, unregulated, and illegal. SEBI more specifically has also asked Grex Alternative Investments Market (Grex), a two-year-old crowd-funding platform, to stop “onboarding” new investors or taking up fundraising mandates from startups, it is reliably learned.

According to SEBI, Electronic platforms facilitating fundraising on digital platforms are neither authorized nor recognized under any law governing the securities market. Such platforms, which are open to all investors registered with the platform, amount to a contravention Securities Contract Act and the Companies Act.

 Pure Donation-Based Crowdfunding (where issuers directly seek a donation from the grantors), Reward-Based Crowdfunding (where issuers directly offer rewards like movie tickets, new computer game, download of a book, etc.) and Peer-to-Peer lending do not fall within the regulatory purview of SEBI, as they do not generally involve issuances of securities for financial return, and may require authorization from other regulators. For example, Peer-to-Peer lending may fall under the purview of RBI.