Compliances of Section 8 Company 6

The goal of founding a Section 8 Company is to promote, stimulate, and nourish activities in the fields of art, science, sports, business, and charity, among others. Section 8 Companies can be classified as Non-Governmental Organizations. These firms have the option of being classified as a 'Limited Company', however, the word 'Limited' is not added to the end of their names. Simply put, Section 8 firms seek to promote underserved areas and industries in India. These companies are not required to pay income or dividends to their members.

List of mandatory Section 8 company compliances

Appointment Of Auditor: A Section 8 company must appoint an auditor to take care of its financial recordings every year.
Maintaining Registers: Maintaining statutory records in registers is expected from Section 8 companies. These registers are maintained every year and the purpose of these registers is to check how the company has performed annually. Information related to members, loans, charges, and investment is provided in the register.
Maintenance Of Financial Statements: Financial records of a Section 8 Company are maintained on an annual basis. Once the financial records are prepared, they are presented in front of the registrar. Financial records consist of the following information:
- Trading Account
- Profit and Loss Account
- Balance sheet
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.
Income Tax Return Filing: Section 8 company are required to file for Income Tax Returns on or before 30th September of the next fiscal year. In order to give complete overview of the company’s income it is essential to file for Income Tax return. But if the company is registered under Section 12A and 80G it can avail the benefit of tax exemption.

Conduct Board Meeting: Board meeting of every company should be held twice a year in case of small companies. The gap between the two meetings should not be more than 90 days.

Conduct Annual General Meeting: Annual General Meeting of the Section 8 Company should be held yearly on or before 30th September. It is necessary for all the directors, members, and auditors to attend the meeting. They should be notified regarding the meeting by giving not less than 21days notice. Form MGT-15 is used to submit the report of Annual General Meeting. The report must be submitted within 30 days of conducting the meeting.

Filing Of Financial Return With RoC: E-form AOC-4 is used to file the copy of financial statements. It is filed within 30 days from the date on which the annual general meeting is held.

Filing Of Annual Return With RoC: Form MGT-7 is used to file the annual return of the company. Annual return is filed within 60 days from the conclusion of the Annual General Meeting. Where at whatever year no Annual General Meeting is held, the yearly return ought to be recorded inside sixty days from the days on which the yearly General Meeting ought to have been held that is 30 September. It ought to be connected with the announcement referencing the explanations behind not holding the Annual General Meeting.

Event-based Annual Compliances of Section 8 Company

Event based, as the name recommends, are the compliances should be documented on the event of explicit occasions. In contrast to annual compliances, these are non-periodical in nature.
Checklist For Event-Based Compliances For Section 8 Company:
1. Transfer of shares
2. Appointment/Resignation of Directors
3. Appointment/Resignation of Auditors
4. Modification in company’s name
5. Modification in the company’s MOA
6. Appointment of Key Managerial Personnel
7. Receipt of share application money
8. Any alteration in the company’s structure

Tax Compliance for Section 8 Companies

Section The company is bound to pay corporate tax as mentioned in the Income Tax Act. However, by adopting certain measures, the company can exempt certain incomes from income tax. To entertain such exemptions, Section 8 Company needs to fulfill the following compliances:

Section 8 companies must be registered under Section 12A of the Income Tax Act with the Principal Commissioner using Form 10A.

It must adhere to the conditions mentioned in Section 11 if the company wants to fall under the criteria of eligibility for the exemption.

Section 80G must approve the company through Form 10B.

Penalties to be charged in case of Non-Compliance

The Ministry of Corporate Affairs has the authority to impose certain penalties in case it encounters any non-compliance with the procedures.

Penalties to be imposed are as follows:

The Central Government may disavow the permit allowed to the organization on the off chance that it finds that the organization is working falsely or in a way violative to the object of the organization.

The organizations will be culpable with fines, which will not be under ten lakh rupees and can be stretched out to one crore rupees.

The chiefs and each official of the organization who is in default will be culpable with detainment for a term which may stretch out to twenty-five lakh rupees or with both.

In the event that it is discovered that the issues of the organization were directed falsely, every official in default will be at risk for activity under area 447.

COMPLIANCE	DUE DATE
AGM (Annual General Meeting)	30thSeptember
AOC-4	Within 30 days of the AGM
MGT-7	Within 60 days of the AGM
Income Tax Return	30th September

Note: The aforementioned Fees is exclusive of GST.

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Compliances of Section 8 Company 6