{"id":2191,"date":"2020-01-20T08:56:11","date_gmt":"2020-01-20T08:56:11","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=2191"},"modified":"2020-11-30T18:14:01","modified_gmt":"2020-11-30T12:44:01","slug":"annual-compliance-for-section-8-company-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/","title":{"rendered":"Annual Compliance for Section 8 Company: A Complete Checklist"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A Section 8 Company is established with the objective to encourage arts, science, sports, research, education, religion, social welfare, and protection of the environment or any other objective. Section 8 Companies are registered as Non- Governmental Organization under the Companies Act, 2013 following the due process of <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>Company Registration<\/strong><\/a>. The promoters of section 8 Company cannot share profits made as a result of charitable activities. The profit made must be invested in the company to promote the non-profitable activities of the company. Section 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<a href=\"https:\/\/corpbiz.io\/section-8-company-compliance\"><strong> Section 8 Company compliances<\/strong><\/a>, they can end up paying the penalty to the Government.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#What_is_Section_8_company\" >What is Section 8 company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#What_are_the_mandatory_Compliances_for_section_8_Company\" >What are the mandatory Compliances for section 8 Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#Event-Based_Annual_Compliances_of_Section_8_Company\" >Event-Based Annual Compliances of Section 8 Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#Know_about_the_Due_dates_for_filing_Section_8_Company_Compliances\" >Know about the Due dates for filing Section 8 Company Compliances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#Penalties_for_Non-Compliance\" >Penalties for Non-Compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#What_is_the_benefit_of_following_annual_compliance_of_Section_8_of_the_Company\" >What is the benefit of following annual compliance of Section 8 of the\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#Contact_Corpbiz_and_avail_our_Services\" >Contact Corpbiz and avail our Services!<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/annual-compliance-for-section-8-company-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Section_8_company\"><\/span>What is Section 8 company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Section 8 Company is a Company that is incorporated with the intention to promote social welfare, charity, protection of environment or any such related activities. Section 8 Company is a legal form of Non- Governmental Organization. These Companies are treated as Limited Companies without adding the phrase limited to it. Section 8 Company Provides no income or dividend to its members.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_mandatory_Compliances_for_section_8_Company\"><\/span>What are the mandatory Compliances for section 8 Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Compliances which are mandatory for section 8 Companies are listed below:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"625\" height=\"549\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/image-30.png\" alt=\"section 8 Company\" class=\"wp-image-2286\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/image-30.png 625w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/image-30-300x264.png 300w\" sizes=\"(max-width: 625px) 100vw, 625px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Appointment of Auditor by filing Form ADT-1<\/h3>\n\n\n\n<ul><li><strong>&nbsp;<\/strong>The Auditor is appointed as per <strong>Section 139 of the Companies Act<\/strong>.<\/li><li>The first auditor in a section 8 Company is to be appointed within 30 days from the date of its incorporation.<\/li><li>The auditor can be an individual or a firm.<\/li><li>The auditor needs to check all the financial filings of the company.<\/li><li>The Auditor is to be appointed in <strong>first Annual General Meeting<\/strong>.<\/li><li>The Auditor shall hold office from the conclusion of the <strong>First Annual General Meeting to the conclusion of the sixth Annual General Meeting that is for five years.<\/strong><\/li><li>A notice of Auditor\u2019s appointment must be filed with the Registrar within fifteen days of the Auditor\u2019s appointment.<\/li><li>All the criteria\u2019s mentioned in <strong>Section 141<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Unlawful_assembly\">[1]<\/a><\/sup> for eligibility of the auditor must be fulfilled.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Maintenance of Financial Statements<\/h3>\n\n\n\n<ul><li>Section 8 Company has\nto prepare its financial records on an annual basis.<\/li><li>After preparation of\nthe financial records and statements, it must be produced to the registrar.<\/li><li>The\nfinancial records shall contain financial statements such as Trading Account,\nProfit and Loss Account and Balance sheet.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Registers are to be maintained<\/h3>\n\n\n\n<ul><li>All\nSection 8 Companies are expected to have statutory records in registers.<\/li><li>Registers\nare to be maintained on a yearly basis to check how active the company has been\nannually.<\/li><li>The\nRegister will contain the details of members, charges, loans and investments.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Preparation of the Director&#8217;s Report<\/h3>\n\n\n\n<ul><li>The Directors Report is to be filed in Form <strong>AOC-4 as per Section 134<\/strong> of the Companies Act, 2013.<\/li><li>A Directors Report is prepared with the intention to explain the shareholders the exact financial position of the company and the scope of its business.<\/li><li>The signed \u2018<a href=\"https:\/\/corpbiz.io\/learning\/minutes-of-meeting-crucial-for-the-organisations-success\/\"><strong>minutes of meetings<\/strong><\/a>\u2019 need to be maintained at the Registered Office.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Income Tax Return Filing<\/h3>\n\n\n\n<ul><li>A Section 8 Company has to file Income Tax Returns on or before 30<sup>th<\/sup> September of the next financial year.<\/li><li>To give a complete overview of the income of the company, it is necessary to<strong> <\/strong><a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\"><strong>file Income Tax returns<\/strong><\/a><strong> <\/strong>online.<\/li><li>But, it can claim certain income to be excluded from income tax.<\/li><li>If the company gets registered under <strong>Section 12A and 80G<\/strong> it can claim from tax exemption.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Hold Board Meeting<\/h3>\n\n\n\n<ul><li>Board\nmeeting of every company should be held twice a year in case of small companies.<\/li><li>The\ngap between the two meetings should not be more than 90 days.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Hold Annual General Meeting<\/h3>\n\n\n\n<ul><li>Annual General Meeting is to be held every year on or before 30<sup>th<\/sup> September.<\/li><li>All the Directors, members, and auditors should be notified about the meeting.<\/li><li>The notice should be sent to the directors, members, and auditors by giving not less than 21 days&#8217; notice.<\/li><li>The notice of the Annual General Meeting should be published on the Company\u2019s Official website.<\/li><li>A report of the Annual General Meeting must be submitted within 30 days of the meeting in Form MGT- 15.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Filing of Financial Statements with RoC<\/h3>\n\n\n\n<ul><li>A\ncopy of financial statements should be filed in <strong>e-form AOC-4<\/strong>.<\/li><li>It\nshould be filed within <strong>thirty days<\/strong>\nfrom the date on which the annual general meeting is held.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Filing of Annual return with RoC<\/h3>\n\n\n\n<ul><li>The annual return is to be filed in <strong>Form MGT-7<\/strong>.<\/li><li>It should be filed within <strong>60 days from the conclusion of the Annual General Meeting<\/strong>.<\/li><li>Where in any year no <a href=\"https:\/\/corpbiz.io\/learning\/annual-general-meeting\/\"><strong>Annual General Meeting <\/strong><\/a>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.<\/li><li>It should be attached with the statement mentioning the reasons for not holding the Annual General Meeting.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/what-are-section-8-companies\/\">What are Section 8 Companies? Know its provisions and Incorporation Procedures<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Event-Based_Annual_Compliances_of_Section_8_Company\"><\/span>Event-Based Annual Compliances of Section 8 Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Some Compliance is event-based. These Compliances need to be filed on the occurrence of certain events. Below is the checklist of event-based compliances:<\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>1.<\/strong>\n  <\/td><td>\n  <strong>Appointment, re-appointment or Removal\n  of Directors<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>2.<\/strong>\n  <\/td><td>\n  <strong>Appointment, re-appointment or Removal\n  of Auditors<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>3.<\/strong>\n  <\/td><td>\n  <strong>Appointment of the Key Managerial\n  person<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>4.<\/strong>\n  <\/td><td>\n  <strong>Transfer of shares<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>5.<\/strong>\n  <\/td><td>\n  <strong>Change in the&nbsp; Company\u2019s name<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>6.<\/strong>\n  <\/td><td>\n  <strong>Any amendment in the Memorandum of\n  Association<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>7.<\/strong>\n  <\/td><td>\n  <strong>Change of Registered Address.<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>8.<\/strong>\n  <\/td><td>\n  <strong>Any other changes in company\u2019s policy.<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Know_about_the_Due_dates_for_filing_Section_8_Company_Compliances\"><\/span>Know about the Due dates for filing Section 8 Company Compliances<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 8 Company should follow compliances within the below mentioned time:<\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>Form No<\/strong>\n  <\/td><td>\n  <strong>Compliance<\/strong>\n  <\/td><td>\n  <strong>Due Date<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>MGT-15<\/strong>\n  <\/td><td>\n  <strong>Annual General Meeting<\/strong>\n  <\/td><td>\n  <strong>30<sup>th<\/sup> September<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>AOC-4<\/strong>\n  <\/td><td>\n  <strong>Directors Report<\/strong>\n  <\/td><td>\n  <strong>Within 30 days of the Annual General\n  Meeting<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>MGT-7<\/strong>\n  <\/td><td>\n  <strong>Annual Returns<\/strong>\n  <\/td><td>\n  <strong>Within 60 days of the Annual General\n  Meeting<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>Form\n  ITR -6<\/strong><strong><\/strong>\n  <\/td><td>\n  <strong>Income Tax Returns<\/strong>\n  <\/td><td>\n  <strong>30<sup>th<\/sup> September<\/strong>\n  <strong>&nbsp;<\/strong>\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalties_for_Non-Compliance\"><\/span>Penalties for Non-Compliance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The Ministry of Corporate Affairs has set up penalty for section 8 Company not complying with the procedures:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The Central Government may&nbsp;<strong>revoke the license<\/strong>&nbsp;granted to the company if it finds that the company is working fraudulently or in a manner violative to the object of the company.<\/li><li>The companies will be punishable with fine, which shall not be less than ten lakh rupees and can be extended to one crore rupees.<\/li><li>The directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to twenty-five lakh rupees or with both.<\/li><li>If it is found that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_benefit_of_following_annual_compliance_of_Section_8_of_the_Company\"><\/span>What is the benefit of following annual compliance of Section 8 of the\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The basic reason for meeting the compliance of Section 8 Company is to avoid penalties. Also, it ensures the smooth functioning of the company. Below are some of the listed points:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Better\nCredibility of the Companies.<\/li><li>Avoid\ngetting into any legal trouble.<\/li><li>To\nbuild trust amongst the customers.<\/li><li>To\navoid penalties.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Contact_Corpbiz_and_avail_our_Services\"><\/span>Contact Corpbiz and avail our Services!<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Our professionals will help you in the end to end process of annual compliance of<strong> <\/strong><a href=\"https:\/\/corpbiz.io\/section-8-company-registration\"><strong>Section 8 Company Registration<\/strong><\/a><strong>.<\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"580\" height=\"340\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/image-27.png\" alt=\"process of annual compliance of Section 8 Company\" class=\"wp-image-2193\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/image-27.png 580w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/image-27-300x176.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 8 Company enjoys various exemptions and benefits over other types of NGOs. It is better to incorporate non-profit organizations in the form of a Company rather than trust or society. The company must follow all the event-based and mandatory compliances to avoid facing penalties imposed by the Government. The Ministry of Corporate Affairs has provided very strong punishments for non-compliance. Section 8 Company enjoys an extra benefit of Tax exemption if it gets registered under <strong>Section 12A and 80G<\/strong> of the Companies Act, 2013.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important\"><a href=\"https:\/\/corpbiz.io\/learning\/registration-of-ngo-in-india-under-12a-and-80g\/\">Tax Exemption for NGOs: Section 12A &amp; 80G<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Section 8 Company is established with the objective to encourage arts, science, sports, research, education, religion, social welfare, and protection of the environment or any other objective. Section 8 Companies are registered as Non- Governmental Organization under the Companies Act, 2013 following the due process of Company Registration. The promoters of section 8 Company [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":2199,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120,325],"tags":[185],"acf":{"service_id":"321"},"authorName":"Deepti Shikha","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/Deepti-Shikha.jpg","authorDescription":"Deepti is a Law graduate with an avid interest in reading and very proficient in summarizing legal cases. She has enough experience in handling legal affairs of the company. In the initial days of her career, she has worked as a legal researcher and has 3+ years of experience.","postViews":27201,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/2191"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=2191"}],"version-history":[{"count":24,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/2191\/revisions"}],"predecessor-version":[{"id":20761,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/2191\/revisions\/20761"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/2199"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=2191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=2191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=2191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}