According to the Companies Act, 2013 it is mandatory for all the Section 8 Company Companies to follow Section 8 Compliance with the MCA (Ministry of Corporate Affairs). The information on Annual Compliance for Section 8 Company can expand your understanding and avail the benefits allowed by the government of India along with many other advantages.
The aim of creating Section 8 Company is to promote, encourage, and nourish activities concerning art, science, sports, commerce, charitable activities, etc. Section 8 Company is categorized as a Non-Governmental Organization. These have the liberty of being treated as ‘Limited Company’, but the word ‘Limited’ is not added in the end.
Section 8 companies work towards promoting needy communities and sectors in the country. There is no need to give income/dividends to its members. These companies are registered with the purpose to promote underprivileged populations and industries in the country. Section 8 company annual compliance is necessary to abide by the varied laws.
Section 8 Company Compliance needs to consider the following:
It is compulsory for a Section 8 company to hire an auditor who takes care of their financial recordings every year.
Section 8 companies are supposed to maintain statutory records. The registers have to be maintained every year and through these statements, the company’s annual performance can also be checked. Through registers, information concerning members, investments, loans, and charges, can be checked.
Financial records of a Section 8 Company needs to be maintained annually. Post the successful creation of financial records, they must be presented in front of the registrar. The financial records include the Trading Account, Balance sheet, and Profit and Loss Account.
As per Section 134 of the Companies Act, Form AOC-4 is required to file the Director’s Report. By preparing a Director’s Report, the shareholders can get an idea about the financial position of the company and how beneficial it will to do business with the particular company.
Section 8 company is supposed to file Income Tax Returns on or before 30th September of the next fiscal year. To provide a complete overview of the company’s income, filing an Income Tax return is mandatory. But in case the company is registered under Section 12A and 80G, it can enjoy tax exemption benefits.
Board meetings of every company must be conducted twice a year if it is a small-size company. The gap between the two meetings must not be more than 90 days.
Annual General Meeting of the Section 8 Company needs to be held yearly on or before 30th September. All the directors, members, and auditors are supposed to attend this meeting and must be notified at least 21 days in advance. Form MGT-15 is used for submitting the report of the Annual General Meeting and the same report needs to be submitted within 30 days of conducting the meeting.
E-form AOC-4 is used to file the copy of financial statements and must be filed within 30 days from the date on which the annual general meeting for annual compliance for section 8 company is held.
Memorandum of Association
Article of Association
DSC
Certificate of Incorporation
Increases the credibility of the company
Builds trust
Helps avoid legal complications
Avoid paying penalties
Filing ADT-1 (Appointment of Auditor)
Books of Accounts Maintenance
Statutory Registers Maintenance
Convening meetings
Report of directors
Financial statements preparation
Filing of Income Tax returns
Financial statements filing (AOC -4)
Annual returns with ROC filing, MGT -7
In case it is found that a particular company is operating dishonestly or against its stated goals, the Central Government owns the right to cancel the license it has granted to the company. The fines levied against the companies must be less than 10 lakhs and cannot exceed 1 crore.
The directors and every officer of the company who is in default have to pay both, monetary fines and imprisonment maximum of upto 25 lakhs.
Non-compliance results in a penalty. So the Section 8 Company must follow all the compliances within the stipulated period of time.
Below are the compliances to be taken care of:
|
DESCRIPTION OF COMPLIANCES |
DUE DATE |
|
AGM (Annual General Meeting) |
30thSeptember |
|
AOC-4 |
Within 30 days of AGM |
|
MGT-7 |
Within 60 days of AGM |
|
Income Tax Return |
30th September |
Thus, similar to other necessities, mandatory compliance for section 8 company is also obligatory. It is better to seek assistance of professionals instead of missing the timely filing of compliances.
We are the one-stop destination for company registration, compliance, and other business solutions. You can hire Valcus Pvt. Ltd. team for section 8 company annual compliances and other services in Delhi, India.
Inability to document Annual Returns could result in a fine of Rupees 50,000 which might extend up to INR five lakh as well. Hence, the compliance team at Valcus advises you to take annual returns and other compliances seriously.
Under the Foreign Contribution and Regulation Act, 2010, in case a particular Section 8 Company meets special requirements, they can get contributions or donations from overseas/outside India from non-residents.
A section 8 Company can have a partnership and a shareholder which can be represented by a partner of the firm on the board of directors.
The MGT-7 Form can be submitted within 60 days of the AGM date. Failure to file could result in a penalty of Rs. 100 per day.
Valcus is known to have expertise in helping Section 8 companies with the accurate filing of forms and annual returns. We guide our clients throughout the annual compliance for section 8 company process and let them complete the entire process from the comfort of their homes.