In this article author explains Meaning of Section 8 Company, Important Features of Section 8 Companies, Mandatory Annual Compliance for Section 8 Companies. In addition to mandatory compliances mentioned in the Article there may be event-based compliances for the Section 8 Company.

Meaning of Section 8 Company:

Under sub-section (1) of this section a company proposed tobe registered as a limited company must—

(a) have in its objects the promotion of commerce, art, science, sports, education,research, social welfare, religion, charity, protection of environment or any suchother object;

(b) intend to apply its profits, if any, or other income in promoting its objects; and

(c) intend to prohibit the payment of any dividend to its members.

Important Features of Section 8 Companies:

A Section 8 company comprises of the following distinct features that most other kinds of companies do not have:

i. Charitable objectives: Section 8 companies do not aim to make profits. Their objectives are purely charitable in nature. They aim to further causes like science, culture, research, sports, religion, etc.

ii. No minimum share capital:Section 8 companies, unlike all other companies, do not require a prescribed minimum paid-up share capital.

iii. Limited liability:Members of these companies can only have limited liability. Their liabilities cannot be unlimited in any case.

iv. Government license:Such companies can function only if they have the Central Government’s license. The Government can revoke this license as well.

v. Privileges:Since these companies possess charitable objectives, the Companies Act has accorded several benefits and exemptions to them.

vi. Firms as members:Apart from individuals and associations of persons, Section 8 also allows firms to be members of these companies

ANNUAL COMPLIANCES FOR SECTION 8 COMPANY:

S. No.   Section & Rules Particular of Compliance
1.  Receipt of MBP-1 184(1)

 

Form

MBP- 1

Every Director of the Company in First Meeting of the Board of Director in each Financial Year shall disclose his interest in other entities.
    Every Directoris required to submit with the Companya fresh MBP-1, whenever there is change in his interest from the earlier given MBP-1.
2.  Receipt of DIR- 8 164(2)

143(3)(g)

Form

DIR – 8

Every Director of the Company in each Financial Year will file with the Company disclosure of non-disqualification.
3.  E- Forms Filing Requirements

Annual Form

92 E-form:

MGT-7

Annual Return: Every Company will file its Annual Return within 60 days of holding of Annual General Meeting.

Annual Return will be for the period 1st April to 31st March.

4.  92

 

 

 

MGT-8 Company having paid up share capital of 10 Crore or more or turnover of Rs. 50 crore or more shall be certified by a Company Secretary in Practice.
5.  137 E-form:

AOC-4

Financial Statement: Company is required to file its Balance Sheet along with Statement of Profit and Loss Account, Cash flow statement,Directors’Reportand Auditors’ Report in this formwithin 30 days of holding of Annual General Meeting.
Attachment:

Balance Sheet, Statement of Profit& Loss Account, Cash Flow Statement, Directors’Report, Auditors’ Report and Notice of AGM.

6.  Annual Form Section 73

 Rule 16

E-form

DPT-3

Return of Deposit: Company is required to file this form every year on or before 30th June in respect of return of Deposit and Particulars not considered as Deposit as on 31st March.
7.  Event Based Form Section 90 BEN-2 Disclosure of Significant Beneficial Owner: Company shall file BEN-2 within 30 days of receipt of BEN-1 from Share holder.

Note: On regular basis company have to check whether there is any SBO in company due to change in its shareholding or due to change in shareholding of body corporate members.

8.  Annual Form Rule 12A DIR-3 KYC KYC of Directors: All the Directors of company shall file this form on or before 30th September every year for all the directors of the Company.
9.  Half Yearly Return Section 405 MSME-1 Delay in Payment to MSME Vendor: Company have to file this return half yearly in respect of pending payments to MSME vendors as at end of half year.

  • April to Sep – 30th October
  • October to March  – 30th April
10.  Directors’ Report 134 Directors’Report shall be prepared by mentioning all the information required for Company under Section 134 read with relevant rules and relevant provisions of other Act.
It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors one of them MD if there is any.
11.  Circulation of Financial Statement &other relevant Dox 136 Company will send to the members of the Company approved Financial Statement,Directors’ Report and Auditors’ Reportat least 14 clear days before the Annual General Meeting.

In case AGM called on shorter notice then above mentioned documents shall be circulated on such shorter period.

For holding of AGM on shorter notice companies need to take the proper approvals as per the Act.

12.  Notice of AGM 101 & SS-II Every Notice of Annual General Meeting will be prepared as per Section 101 of Companies Act 2013.
13.  Sending of Notice of AGM 101 & SS Notice of Annual General Meeting will be sent to following:

  • All Directors, Members, Auditors& Debenture Trustees.
14.  Board Meetings 173 &

SS-I

Every Company shall hold a minimum number of two meetings of its Board of Directors every year in such a manner that AT LEAST ONE MEETING WITHIN EVERY 6 CALENDAR MONTH.
15.  Maintenance of Statutory Registers 88 and other sections Company will maintain the following mandatory Registers:

  • Register of Director,
  • Registers of Director Shareholding,
  • Registers of Members
  • Registers of Transfer
  • Registers of Related Party transaction etc
16.  Appointment of Auditor 139 E-form

ADT-1

Auditor will be appointed for 5 (Five) years and form ADT-1 will be filed for 5-year appointment within 15 days of Annual General Meeting.
Above mentioned 16 (Sixteen) Compliances are mandatory yearly compliances for the Section 8 Company. Except above 16 (Sixteen), there may be event-based compliances for the Section 8 Company.

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION

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