Section 8 Company Compliances

A Section 8 company is one that is registered as a not-for-profit organization under Section 8 of the Companies Act 2013. Unlike other companies under the Act, Section 8 companies do not operate for profit. monetary, but rather work for the betterment of society and predominantly the welfare of people. The fundamental objective of these companies is to promote the arts, sciences, culture, sports and encourage educational or religious activities.

As these companies evolve for charitable purposes, the profits obtained are not shared among the members of the company. Ideally, the profit is invested back into the company to carry out the activities of the company.

Annual Compliance for Section 8 company:

1. Appointing of Auditors: The company must appoint an auditor who will be responsible for auditing the financial statements. The auditor must be a member of the Institute of Chartered Accountants of India (ICAI).
2. Holding of Annual General Meeting (AGM): The AGM must be held once a year within 6 months from the end of the financial year. The AGM is an opportunity for the shareholders to review the company’s performance and make important decisions.
3. Preparing Director’s Report: Section 134 of the Companies Act, 2013 says that Form AOC-4 is needed to file the Director’s Report. The purpose of preparing a Director’s Report is to give shareholders a preview of the financial position of the company and the scope of its business. The signed ‘minutes of meetings’ is required to be maintained at the Registered Office.
4. Filing of Financial Statements: The financial statements must be filed with the MCA (Form AOC-4) 30 days from the date of AGM. The statements must accurately reflect the company’s financial performance for the year.
5. Filing of Annual Return: The annual return must be filed with the MCA (Form MGT-7) within 60 days from the closure of the financial year. It must contain accurate information about the company’s shareholders, directors etc.
6. Filing of Income Tax Returns: The company must file its income tax returns with the Income Tax Department on an annual basis.
7. Compliance with Income Tax Dept: Form 10B and Form 10BD must be submitted by NGO that have been registered under Section 12A and 80G of the Income Tax Act of 1961 respectively. This forms includes information about the NGO’s operations, financial statement, adherence to Act requirements, donation list and financial resource use.
8. DIR- 3 KYC: All the directors must file form DIR-3 KYC with the MCA within 30^th September each year, otherwise their DIN will be deactivated.

By complying with these requirements, you can ensure that your Section 8 company remains in good standing with the MCA and continues to operate smoothly. If you need assistance with your annual compliance, please do not hesitate to reach out to a professional consultant or legal expert.