Annual Compliance for Section 8 Company

A section 8 companies is established in order to encourage and nourish the act of arts, commerce science, sports, education, research, social welfare, religion, charity, protection of environment or any such other objective. The Section 8 companies fall under the Companies Act 2013 which would be registered as an Non-Governmental Organization. A company registered as Section 8 company cannot share profit made as a result of the charitable activities between its partners. The profit made during the functional part must be invested back into the company to promote trust and non profitable activities to give back. ection 8 Company has to follow the Compliances defined under the Companies Act, 2013. It is essential for Section 8 Company to follow compliances prescribed by the Government. If a company does not stay updated with Section 8 Company compliances, they can end up paying the penalty to the Government.

Rietway Consultants Section 8 Compliance Package

The Services which are included in our package are as Follows:
✅ Preparation of Financial Statements
✅ Annual Report
✅ Director’s Report
✅ Director’s KYC
✅ Income Tax Return of Company
✅ Filing of Form Aoc-4 to ROC
✅ Filing of Form MGt-7 to Roc
✅ Filing of Form INC 20 A for Commencement of Business

Documents Required for Section 8 Compliances

1. Certificate of Incorporation
2. MOA/ AOA of Company
3. Digital Signatures of Director
4. Bank Statement of Company

Section 8 Company Compliances Procedure

Step -1 Arrange all Required Documents: The first step is to arrange all the documents and send the same over the email / WhatsApp to us. Once all the Documents are Received, we will Start the Further Process.
Step-2: Preparation of Documents: The Next Step is Preparation of Documents to be Submitted at Department.
Step-3: Finalization of Balance Sheet and ITR: The Next Step is Finalization of Balance Sheet and ITR to be submitted.
Step-4: Preparation of Notices and Board Minutes: The Next Step is Preparation of Notices and Board Minutes.
Step-5: Submission of Forms: The Next Step is Filing of Forms i.e ADT-1. AOC-4. MGT-7 to ROC.

Checklist For Annual Compliance

Appointment of An Auditor: Under section 139 of the Companies Act 2013, it is mandatory for companies to appoint an auditor. The book of accounts and annual returns of the company shall be maintained.

Maintenance of A Register: The company shall maintain a statutory register consisting of loans obtained, charges created, its members, etc as enumerated under section 8 of the companies act 2013.

Convening Meeting: Annual general body meeting and other statutory meetings have to be conducted.

Report by Directors: Directors of the company shall file their annual report in an appropriate manner, consisting of fiscal data and corporate social responsibility. The board directors are responsible for this report.

Financial Statement of The Company: The balance sheet, profit and loss A/C, cash flow statement and other financial statements to be filed by the company for the previous financial year.

Tax Returns: At the end of every assessment year, before 30th September, tax returns are to be filed.

Filing of Financial Statements: The financial statement shall be filed in the appropriate form ( E-FORM AOC-4), within 30 days from the last general body meeting.

Filing Returns: Limited companies need to file the Form MGT-7 with Registrar of Companies (RoC), for filing returns within 60 days of the annual general meeting.

What Are The Compliances For A Section 8 Company?

All the benefits of a Section 8 company, such as the ability to raise funds in the form of donations and contributions achieved through disciplined compliance.

A Section 8 company is a form of NGO registered under the Companies Act, 2013. According to which all Section 8 companies must adhere to the compliance levied by Registrar of Companies (RoC) and Income tax authorities. Failure to fulfill their compliance requirements results in paying heavy penalties (up to Rs. 1 lakh a year), and chances are such organizations and their directors’ may even get blacklisted for a period of time.

Compliances for Section 8 companies

Notice as to the appointment of Auditor within 15 days of the appointment -

Form ADT- Director’s consent form (Form DIR 2) to occupy the office within 30 days from the director’s appointment.

Returns form (Form MR-1) within 60 days from the appointment of Managing Director, manager or key managerial person.

FAQ on Section 8 Company Compliances

Can Section 8 Companies claim full tax exemption?
Yes. By fulfilling the conditions specified by the relevant provisions under the Income Tax Act, Section 8 Companies can claim full exemption.

Can section 8 Companies issue dividends to its members?
A Section 8 Company can be incorporated as a company limited by shares or guarantee, with or without share capital. Irrespective of the category of the company, a Section 8 company cannot issue dividends to its members.

What is the penalty for failure to appoint an Auditor within the prescribed time?
Failure to appoint an Auditor is punishable with a fine of Rs. 25,000 which may extend up to Rs. 5,00,000.

What happens if I don’t file my Annual Returns?
Failure to file Annual Returns is punishable with a fine of Rupees 50,000 which may extend to Rupees five lakh.