Overview
A Section 8 Company is formed under the Companies Act, 2013 for promoting charitable objects such as education, social welfare, environment protection, art, culture, sports, research or any other nonprofit activity. Unlike other companies, a Section 8 Company does not distribute profits to its members. The income earned must be utilized only for the objectives mentioned in the Memorandum of Association. Due to its structured legal framework and high credibility, many NGOs, trusts and social organizations prefer this format.
Even though a Section 8 Company works for non profit purposes, it must strictly comply with the provisions of the Companies Act, 2013 and other applicable laws. Annual compliance is mandatory irrespective of whether the company has conducted financial transactions during the year or not. Non compliance may result in heavy penalties, disqualification of directors and even cancellation of Section 8 licence by the Registrar of Companies.
Annual compliance for Section 8 Company mainly includes conducting board meetings, maintaining statutory registers, preparation of financial statements, appointment of auditor, filing of annual return, filing of financial statements, Income Tax return filing and other event based compliances. The company must also comply with provisions relating to CSR reporting, if applicable, and ensure that its activities are aligned with its registered objectives. Timely filing of forms such as AOC 4 and MGT 7A is crucial to avoid additional fees and penalties.
At BizGlobal, we understand that many Section 8 Companies are focused on social work and may not have dedicated legal or compliance teams. Our experts ensure complete annual compliance management including documentation, drafting of board resolutions, preparation of financial statements and timely ROC filings. We help you stay compliant so that you can focus on your mission without worrying about legal complications.
