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Section 8 Annual Compliance

  • Maintaining of Books of Accounts of the Company
  • Maintaining of Statutory Registers
  • Convene Statutory Meetings
  • Preparing of Financial Statements of the Company
  • Filing of Income Tax Returns
  • Filing of Financial Statement Returns (AOC-4)
  • Filing of Annual Return (MGT-7 -ROC Annual Returns)

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What is the Annual Compliance For Section 8 Company?

A Section 8 Company is a Non-Governmental Organization and one of the types of companies stated in The Companies Act 2013. Therefore, a Section 8 Company is required to file Compliances as mentioned in the Act.

All Section 8 Companies are incorporated to encourage sports activities, art, science, religion, charitable activities, etc. Also, these companies are obligated to file Annual Compliances and Event-Based (one-time) Compliances with The Ministry of Corporate Affairs (MCA).

What are the benefits of Filing Compliances?

Essential To Avoid Penalties

Failure in filing of compliances may lead to heavy finesand penalties which isto be paid by the company.

Building Trust

All companies that file compliances and disclose their financial details punctually are considered to be trustworthy companies in the eyes of suppliers, vendors, dealers and customers/clients.

Transparency of Activities

A Company filing compliances shows the clear and actual position of company operations. Filing of financial returns is one of the compliances thatcan reveal the financial health of the company.

Avoid any Legal Troubles

Failure in filing of compliances may lead to legal accusations such as legal notice from The Ministry of Corporate Affairs. Therefore, to avoid any legal troubles, one should file compliances timely.

Maintenance of Credibility

In case the compliances are timely filed, it is easier for a company to get market credit and financial aid than a company whose compliances are not filed.

What is the list of Annual Compliances for Section 8 Company?

Annual compliances are the compliances that are to be filed annually. These are recurring in nature and every company is obligated to file compliances.
Following is the list of annual compliance for a Section 8 Company:

Appointment of Auditor for the Company

Appointment of an Auditor is essential for every Section 8 Company.Each Section 8 Company needs to appoint an auditor to maintainthe Books of Accounts of the company.

Maintenance of Books of Accounts

Every Section 8 Company is counted upon to maintain its Books of Accounts regularly. This includes maintenance of all financial transactions related to income, expense, and donations, etc., done by the Company.

Maintenance of Statutory Registers

Statutory Registers provide an overview of the working structure of the company.Therefore, it is compulsory for the Section 8 Company to maintain its statutory registers.

Convene Statutory Meetings

Every Section 8 Companyis obligated to convene a meeting of the Board of Directors and meeting of shareholders of the Company.

Financial Statements Preparations

It is an obligation for a Section 8 Company to prepare its financial statements properly. Financial statements are records of financial transactions that occurred in the company.

Filing of Income Tax Returns

All Section 8 Companiesare under obligation to file their income tax returns by the end of September, i.e., by September 30 of the following financial year.

Filing of Financial Statement Returns (AOC-4)

It is essential for a Section 8 Company to file Form AOC-4 along with prescribed supporting documents within 30 days of the Annual General Meeting takes place. This return consists of information of the financial statements of the company.

Filing of Annual Return (MGT-7 -ROC Annual Returns)

Every Section 8 Company needs to file its Annual Return with the Ministry of Corporate Affairs through Form MGT -7.

What are the One-Time Compliances for Section 8 Company?

The compliance which is required to be followed only at the time of registration of business entity is known as One-time Compliance. These compliances are non-recurring in nature that means they are not required to be filed repeatedly.

The obligation to file such compliance occurs due to a specific event. The list of event-based or one-time compliances is as follows:

  • For the event of Allotment of shares of the Company
  • Receipt of Share Application money
  • In the event of  Appointment/Resignation of Directors of the Company
  • In Appointment/Resignation of Managing Director (MD)/ Whole Time Director (WTD)
  • Transfer of shares of the Company
  • Execution of  agreement with related parties
  • Changes in the Bank signatories
  • Any change in the Statutory Auditor
  • Additional Compliances- Registration for 80G and 12AA(Optional)

What are the due dates for Section 8 Company Compliances?

By filing compliances on time, all Section 8 Companies should try to avoid penalties and fines that can be levied on them. Below are the due dates for filing of compliances for a Section 8 Company.

Compliance Due Date
Annual General Meeting September 30
AOC-4 Within 30 days of Annual General Meeting
MGT-7 Within 60 days of Annual General Meeting
Income Tax Return September 30

Penalties for Failure in Filing of Compliance

All Section 8 Companiesmust file compliances punctually and with all required records. Failure of which can attract heavy penalty on the Company.

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