Section 8 Company Annual Compliance- An Overview
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:
- 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).
- 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.
- 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.
- 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.
- 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.
- Filing of Income Tax Returns: The company must file its income tax returns with the Income Tax Department on an annual basis.
- 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.
- DIR- 3 KYC: All the directors must file form DIR-3 KYC with the MCA within 30th 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.
Do the annual compliance of your NGO before its too late @ Rs. 10,999/-
The Ministry of Corporate Affairs has the authority to impose certain penalties in case it encounters any non-compliance with the procedures.
What will you get?
Auditor Appointment
Financial Statement
Audit Report
Board Report
AGM Resolution
DIR-3 KYC
AOC-4 Filing
MGT-7 Filing
Income Tax Filing
Documents Required for Annual Compliance of Section-8 Company
Incorporation Documents
Bank Statement
Accounts if Available
DSC of Directors
Donation List
Shareholders List
Benefits of Complying Annual Compliance
Maintains Good Standing with the Government
Compliance with the annual requirements set forth by the Ministry of Corporate Affairs (MCA) ensures that your Section 8 company remains in good standing with the government.
Avoids Penalties and Fines
Non-compliance with the annual requirements can result in penalties, fines, and even the suspension of your company’s operations. By fulfilling the annual requirements, you can avoid these consequences and maintain the smooth functioning of your company.
Protects Shareholder Interests
The annual general meeting (AGM) provides an opportunity for shareholders to review the company’s performance and make important decisions. This protects the interests of shareholders and ensures that the company is operating in their best interests.
Increases Transparency
By filing accurate financial statements and annual returns, your company’s financial information is made publicly available. This increases transparency and allows stakeholders to assess the company’s financial performance.
Demonstrates Responsibility and Professionalism
Compliance with annual requirements demonstrates that your company takes its responsibilities and obligations seriously. This helps to build trust with stakeholders and enhances the company’s reputation.
Facilitates Future Investments
Compliance with annual requirements can help to attract potential investors and improve the company’s financial stability. Investors are more likely to invest in companies that have a proven track record of responsible and professional operations.
How we work?
Step 1: Consultation with Expert
Step 2: Preparing the Documents
Step 3: Filing Returns
Step 1: Consultation with Expert
Our expert will call you after your contact form submission, then after consultation you will submit all the required documents to us for further processing.
Step 2: Preparing the Documents
After your documents submission we will prepare the financial statements and draft all the resolution, board report etc.
Step 3: Filing Returns
After getting audited financials we will file the required forms with MCA and Income tax dept.
Are you still confused?
Our team of experts can help you out finding the best solution for you. Contact us today!
Frequently Asked Questions
A Section 8 company is a non-profit organization that is registered under the Companies Act, 2013. It is incorporated for the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such other object.
The annual requirements for a Section 8 company include filing of the annual return, holding an annual general meeting (AGM), filing of financial statements, appointing an auditor, and filing of income tax returns.
The annual return must be filed within 60 days from the closure of the financial year.
The AGM must be held once a year within 6 months from the end of the financial year.
The financial statements must be filed within 30 days from the date of the AGM.
The auditor must be a member of the Institute of Chartered Accountants of India (ICAI).
Compliance with the annual requirements ensures that your Section 8 company remains in good standing with the government and protects the interests of shareholders. It also demonstrates the company’s responsibility and professionalism, attracts potential investors, and facilitates future investments.
Non-compliance with the annual requirements can result in penalties, fines, and even the suspension of your company’s operations.
Professional consultants or legal experts like LEGALX INDIA can assist with the annual compliance requirements.
An auditor is responsible for auditing the financial statements and ensuring that they accurately reflect the company’s financial performance for the year. This helps to maintain transparency and build trust with stakeholders.
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