Summary: This editorial outlines the annual compliance requirements for Section 8 Companies under the Companies Act, 2013, along with relevant amendments and exemptions till March 2025. Section 8 Companies are non-profit entities formed to promote commerce, education, science, arts, charity, social welfare, and related objectives. These companies must apply their income solely towards their objectives and are prohibited from distributing dividends. They also enjoy certain exemptions under notifications issued on 5th June 2015 and 13th June 2017. Key features of Section 8 Companies include the absence of a minimum capital requirement, limited liability for members, eligibility for government-issued licenses, and the ability for firms to become members. Annual compliance involves various statutory disclosures, filings, and procedural requirements spread across four quarters. From April to June, companies must collect MBP-1 and DIR-8 from directors, file MSME-1 and PAS-6, and submit DPT-3 for deposits. Between July and September, financial statements must be approved and the Directors’ Report prepared. The Annual General Meeting (AGM) must be held within six months of the financial year’s end, and related notices and documents must be circulated as per legal standards. Directors must also complete DIR-3 KYC by 30th September. In the third quarter (October–December), companies must file AOC-4 and MGT-7 within 30 and 60 days, respectively, of the AGM. If applicable, MGT-8 certification is required for companies with higher capital or turnover thresholds. Although no specific filings are mandated in Q4, companies must hold at least four board meetings annually, maintain statutory registers, and file ADT-1 for auditor appointments within 15 days of the AGM. There are 18 mandatory annual compliances for Section 8 Companies, in addition to any event-based requirements that may arise during the financial year.
BACKGROUND:
In this Flash editorial, the author begins by referring to the provisions of the Companies Act, 2013 read with all the Amendment Acts and rules mentioned there till March 2025.
As per the latest amendments, Companies requirements for the compliances have been changed in comparison of to the compliance requirement as on 01st April 2014, when the Companies Act, 2013 came into effect.
After the commencement of the Companies Act, 2013 from 01st April 2014, the Compliance requirement of Companies have been increased. But 5th June 2015 and 13th June 2017 notification have been provided “EXEMPTIONS” to the Section 8 Companies.
Meaning of Section 8 Company:
Under sub-section (1) of this section a person or an association of persons proposed to be registered under this Act 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 such other 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.
b) 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. | Forms | Section & Rules | Particular of Compliance | ||
| QUARTER – I – APRIL TO JUNE | |||||
| 1. | Receipt of MBP-1
(DG) |
184(1) | Form
MBP- 1 |
Every Director of the Company in the First Meeting of the Board of Director in each Financial Year shall disclose his interest in other entities. | |
| Every Director is is required to submit with the Company a fresh MBP-1, whenever there is a change in his interest from the earlier given MBP-1. | |||||
| 2. | Receipt of DIR- 8
(DG) |
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. | Half Yearly Return
(DG) |
Section 405 | MSME-1 | Delay in the Payment to the MSME Vendor: Company have to file this return half yearly in respect of the pending payments to MSME vendors as at end of half year.
April to Sep – 31st October October to March – 30th April |
|
| 4. | Half Yearly Return
(May) (DG) |
Rule 9A (3) | PAS-6 | Reconciliation of Share Capital Audit Report. Company is required to submit the reconciliation share capital Audit report with the ROC audited by a practicing Company Secretary as at end of half-year:
April to Sep – 30th November |
|
| 5. | Annual Form- Return of Deposit
(June0 (DG) |
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 the return of Deposit and Particulars not considered as Deposit as on 31st March. | |
| QUARTER – II – JULY TO SEPTEMBER | |||||
| 6. | Approval of Financial Statement
(DG) |
134 | Preparation and Approval of Financial Statement. The auditors’ report shall be attached to every financial statement. | ||
| 7. | Directors’ Report
(DG) |
134 | Directors’ Report shall be prepared by mentioning all the information required for the 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 should be a MD if there is any. | |||||
| 8. | Holding of AGM
(DG) |
96 | Every company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting.
it shall be held within a period of six months, from the date of closing of the financial year. |
||
| 9. | Notice of
AGM (DG) |
101 & SS-II | Every Notice of the Annual General Meeting will be prepared as per Section 101 of the Companies Act, 2013 and Secretarial Standard – II. | ||
| 10. | Sending of Notice of AGM
(DG) |
101 & SS | Notice of the Annual General Meeting will be sent to all the :
|
||
| 11. | Circulation of Financial Statement &other relevant Doc
(DG) |
136 | Company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 21 clear days before the Annual General Meeting.
In case the AGM is called on shorter notice then above mentioned documents shall be circulated on such shorter period. For holding of the AGM on shorter notice, companies need to take the proper approvals as per the Act. |
||
| 12. | Annual Form
(DG) |
Rule 12A | DIR-3 KYC | KYC of Directors: All the Directors of the Company shall file this form on or before 30th September every year. | |
| QUARTER – III – OCTOBER TO DECEMBER | |||||
| 13. | Annual Form
(DG) |
137 | E-form:
AOC-4 |
Financial Statement: Company is required to file its Balance Sheet along with the Statement of Profit and Loss Account, Cash flow statement, Directors’ Report and Auditors’ Report in this form within 30 days of holding of the Annual General Meeting. | |
| Attachment:
Balance Sheet, Statement of Profit & Loss Account, Cash Flow Statement, Directors’ Report, Auditors’ Report and the Notice of the AGM |
|||||
| 14. | E- Forms Filing Requirements
Annual Form (DG) |
92 | E-form:
MGT-7 |
Annual Return: Every Company will file its Annual Return within 60 days of holding of the Annual General Meeting.
Annual Return will be for the period from 1st April to 31st March. |
|
| 15. | Certification of Annual Return
(DG) |
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. | |
| QUARTER – IV – JANUARY TO MARCH
There is no mandatory compliance for this quarter |
|||||
| 16. | Board Meetings
(DG) |
173 &
SS-I |
Every Company shall hold a minimum number of FOUR meetings of its Board of Directors every year in such a manner that maximum gap between the two meetings should not be more than 120 (One hundred twenty) days. | ||
| 17. | Maintenance of Statutory Registers
(DG) |
88 and other sections | Company will maintain the following mandatory Registers:
|
||
| 18. | Appointment of Auditor
(DG) |
139 | E-form
ADT-1 |
The Auditor will be appointed for 5 (Five) years and form ADT-1 will be filed for a 5-year appointment within 15 days of the Annual General Meeting. | |
| Above mentioned 18 (Eighteen) Compliances are mandatory annual compliances for the Section 8Company.
Except above 18 (Eighteen), there may be event-based compliances for the Section 8 Company. |
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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
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