Section 8 Compliance

Section 8 Company

Section (8) companies refer to those companies whose aim is not earn profit, they are mainly established with the purpose of social welfare. According to the companies act 2013, section 8 companies can be formed either as Private Limited company, LLP or Public Limited Company.  This company established for the promotion of art, commerce, science, sports, education, protection of environment, research, social welfare, religion and charity or any such other object. This company is not set up for the purpose of profit. If the company makes any profit, then its dividend is not distributed among the members.  A non- profit organization can be registered as a society under the registrar of societies or as a trust.

Event based compliances of section 8 company  

These are triggered based on happening of certain events-

  • Receipt of share application money
  • Appointment or resignation of directors
  • Transfer of share
  • Allotment of shares
  • Appointment of managing director or whole time director
  • Change of company name
  • Amendment in the company MOA
  • Change in company registered address
  • Appointment of KPM (Key managerial personnel)
  • Any other changes in the company structure, etc.

Documents required for annual compliances of section 8 company

  • Memorandum of association
  • Article of association
  • DSC
  • Certificate of incorporation

Compliance’s Mandatory for Section 8 Company

Appointment of Auditor by Filing form ADT-1

Form ADT-1 is used by a company to intimate the registrar of companies about the appointment of an auditor after the completion of its annual general meeting. Section 139(1) of the new companies Act 2013 mandates this and this form has to be filed every year after the AGM in which the auditor was appointed. Form ADT-1 must be filed with registrar of companies within 15 days from the date of appointment of the auditor.

Maintenance of Financial Statement

Every section 8 company has to prepare its record on annual financial records and statements, it must be produced to the registrar. Financial records shall contain financial statements such as trading account, profit and loss account and balance sheet.

Maintenance of a Register

All the companies belonging to section 8 category are expected to have statutory records maintained update for the following member’s changes, loans and investments. The above would give an overview of have active the company has been on yearly basis.

Convening meeting

Section 8 companies are under obligation of convene to convene a meeting of the board of directors and meeting of shareholders.

Report by Directors

 The director’s report is to be filed in form AOC-4 as per section 134 of the companies Act 2013. Directors of the company shall file their Annual report in an appropriate manner, consisting of fiscal date and corporate social responsibility.

 Income Tax Return Filing

A section 8 company has to file income tax return on or before 30th September of the next financial year to give a complete overview of the income of the company, it is necessary to file income tax return online. If the company gets registered under section 12A and 80G it can be claim from tax exemption. 

Hold Board Meeting

Every company should hold meeting with the board members at least twice a year and the gap between both the meetings should not be more than 90 days.

Hold Annual General Meeting

Annual general meeting is to be held every year on or before 30th September. All the directors, members and auditors should be notified about the meeting. Notice should be sent by the director’s members and auditors by giving not less than 21 days. The notice of annual general meeting should be published on the company’s official website. A report of the annual general meeting must be submitted within 30 days of the meeting in form MGT-15.

Filing of Finance Statement

It is mandatory for a section 8 company to file AOC-4 along with supporting documents. This return comprises details of the financial statements of the company. This is filed 30 days of the date of annual general meeting.

Filing of Annual return Filing

The annual return is to be filed in form MGT-7 and it should be filed within 60 days from the conclusion of the annual general meeting. Where in any year no annual general meeting is held the annual return should be filed within sixty days from the days on which the annual general meeting should have been held that is 30 September.

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