Section 8 Company Compliance – Overview
Section 8 companies in India are non-profit entities established under the Companies Act, 2013. Their primary objective is to promote causes such as:
Social welfare and charitable activities
Education and research
Arts, culture, and science
Religious or spiritual objectives
Unlike standard private or public companies, profits generated by a Section 8 company cannot be distributed among its members. Instead, all surpluses are reinvested to further the company’s objectives. Additionally, these companies are prohibited from using “Limited” or “Private Limited” in their registered name, which distinguishes them as non-profit organisations.
Benefits of Complying with Section 8 Company Regulations
Promotes Charitable Goals
Section 8 Companies focus on social welfare, education, charity, religion, and other public benefit initiatives, enabling members to contribute meaningfully to society.Limited Liability Protection
Members enjoy limited liability, safeguarding personal assets from company debts or legal obligations, creating a secure environment for philanthropic work.No Minimum Capital Requirement
These companies can be formed without a minimum capital investment, making it accessible for individuals or groups wanting to start non-profit initiatives.Tax Advantages
Section 8 Companies are eligible for tax exemptions under the Income Tax Act, encouraging donations and funding from individuals and organizations.Perpetual Succession
The company continues to exist irrespective of changes in membership, ensuring long-term stability and continuity in achieving charitable objectives.Ease of Funding
They can receive financial support from individuals, government schemes, corporate grants, and other organizations, helping them pursue their objectives effectively.Enhanced Credibility and Public Trust
The Section 8 status signifies a genuine non-profit structure, which fosters trust among donors, stakeholders, and the public.Structured Corporate Governance
A defined corporate structure ensures proper management, accountability, and smooth decision-making within the organization.Social Impact
By working on charitable and social welfare initiatives, Section 8 Companies make a tangible difference in communities.Transparent Compliance Framework
Strict adherence to legal and regulatory requirements ensures accountability and strengthens the company’s credibility.Access to Grants and Subsidies
These companies can tap into government and NGO funding programs to support their philanthropic initiatives.Simplified Registration Process
Compared to other business entities, registering a Section 8 Company is more straightforward, encouraging more individuals to start non-profit organizations.
Documents Required for Section 8 Company Compliance
To maintain compliance as a Section 8 company in India, the following documents are essential:
1. Core Documents
Memorandum of Association (MoA): Outlines the objectives and activities of the company.
Articles of Association (AoA): Sets the internal governance rules and operational guidelines.
Certificate of Incorporation: Confirms that the company is legally established.
Digital Signature Certificate (DSC): Required for filing electronic forms with the Ministry of Corporate Affairs (MCA).
2. Financial Documents
Financial Statements: Annual audited statements including balance sheet, profit & loss account, and cash flow statement prepared by a Chartered Accountant.
Auditor’s Report: Independent assessment of the financial statements.
Income Tax Return (ITR-7): Filed annually, even if the company has no taxable income.
3. Compliance Documents
Annual Return (Form MGT-7): Contains details about directors, shareholders, registered office, and other key information.
Form AOC-4: Filed to submit the company’s financial statements to the Registrar of Companies.
Form ADT-1: Filed when appointing an auditor for the company.
4. Additional Registrations (if applicable)
Section 12AA Registration: For income tax exemption under Section 12A of the Income Tax Act.
Section 80G Registration: Enables donors to claim tax deductions for contributions to the company.
5. Other Supporting Documents
Board Resolutions: Formal documentation of decisions made by the board of directors.
Minutes of Meetings: Records of proceedings for shareholder and board meetings.
Statutory Registers: Maintains records of directors, shareholders, meetings, and other company information.
Compliance Timelines
Annual Return (Form MGT-7): Within 60 days of the Annual General Meeting (AGM).
Financial Statements (Form AOC-4): Within 30 days of the AGM.
Income Tax Return (ITR-7): By 30th September of the following financial year.
Mandatory Compliances for Section 8 Companies
Annual General Meeting (AGM)
Conduct the AGM within six months of the financial year-end.
Annual Return Filing (Form MGT-7)
File the company’s annual return with the Registrar of Companies (RoC).
Financial Statement Filing
Submit audited financial statements (Balance Sheet, Profit & Loss Account, Cash Flow Statement) to the RoC.
Appointment of Auditors
Appoint a qualified Chartered Accountant (CA) as the company auditor.
Auditor’s Report Submission
File the auditor’s report with the RoC along with financial statements.
Income Tax Filing (Form ITR-7)
Submit the company’s income tax return annually to the Income Tax Department.
Books of Accounts Maintenance
Keep detailed and accurate records of all financial transactions.
Regular Audits
Conduct annual audits by a qualified CA to ensure compliance and transparency.
Fund Utilisation Compliance
Ensure all funds are used exclusively for the company’s charitable objectives.
Official Documents Display
Display the company’s name and registration number on all official communications and documents.
Registers Maintenance
Maintain updated registers of members and debenture holders.
Companies Act Compliance
Follow all applicable provisions of the Companies Act, 2013, including amendments, rules, and notifications.
Mandatory Section 8 Company Compliances
Annual General Meeting (AGM)
Conduct the AGM within six months after the financial year-end.
Annual Return Filing (Form MGT-7)
Submit the annual return to the Registrar of Companies (RoC) with details of directors, members, and company information.
Financial Statements Filing (Form AOC-4)
File audited financial statements including balance sheet, profit & loss account, and cash flow statement with the RoC.
Appointment of Auditors
Appoint a qualified Chartered Accountant (CA) as the company auditor for the financial year.
Submission of Auditor’s Report
Submit the auditor’s report along with financial statements to the RoC.
Income Tax Return Filing (Form ITR-7)
File income tax returns annually with the Income Tax Department.
Maintenance of Books of Accounts
Keep proper books of accounts and all financial records accurately maintained.
Regular Audits
Conduct annual audits by a qualified CA to ensure transparency and compliance.
Utilisation of Funds
Ensure that all income and funds are used strictly for the company’s charitable purposes.
Display of Company Details
Mention the company’s name and registration number on all official documents, correspondence, and communications.
Maintenance of Registers
Maintain registers of members and debenture holders.
Compliance with Companies Act, 2013
Follow all relevant provisions, rules, and amendments issued by the government for Section 8 companies.
Event-Based Annual Compliances of Section 8 Company
| Compliance Event | Description | Deadline / Frequency |
|---|---|---|
| Annual General Meeting (AGM) | Hold AGM to present and approve financial statements (Balance Sheet, P&L). | Within 6 months from the end of the financial year |
| Income Tax Return (ITR-7) | File annual income tax return with the IT Department. | Usually by July 31 of the assessment year |
| Financial Statements | Prepare and file audited Balance Sheet, P&L Account, and other required statements. | Within 30 days from conclusion of AGM |
| Annual Return (Form MGT-7) | File annual return with RoC detailing activities, shareholding, directors, and KMP. | Within 60 days from conclusion of AGM |
| Board Meetings | Hold at least 4 board meetings annually; maximum gap of 120 days between two meetings. | Throughout the year |
| Changes in Board of Directors | Intimate RoC of any appointment, resignation, or removal of directors. | Within prescribed time via relevant forms |
| Change in Registered Office | Notify RoC about any change in registered office address. | Within prescribed time via relevant forms |
| Foreign Contributions (FCRA, if applicable) | Submit annual report of foreign contributions received and utilised. | As per FCRA guidelines |
| GST Compliance (if applicable) | File GST returns and comply with applicable GST regulations. | As per GST filing schedule |
This table provides a clear and actionable roadmap for keeping a Section 8 Company compliant with statutory requirements.
Annual Compliances for Section 8 Company
1. Appointment of Auditor
Appoint a qualified auditor to audit the company’s financial statements annually.
File Form ADT-1 with the Registrar of Companies (RoC) within 15 days of appointment.
2. Maintenance of Books of Accounts
Maintain accurate and updated financial records, including:
Cash Book
Ledgers & Journals
Receipt & Payment Accounts
Profit & Loss Accounts
Balance Sheets
3. Statutory Meetings
Annual General Meeting (AGM): Within 6 months of the financial year-end.
Board Meetings: At least once every 3 months.
4. Financial Statements
Prepare and file audited financial statements with RoC within 30 days of AGM.
Financial statements include:
Balance Sheet
Profit & Loss Account
Cash Flow Statement (if applicable)
5. Income Tax Return (ITR)
File ITR-7 annually, even if the company is exempt from tax.
Due Date: 30th September of the following financial year.
6. Annual Return (Form MGT-7)
File Form MGT-7 with RoC within 60 days of AGM.
Contains details of:
Directors
Shareholders
Key events & changes during the year
7. Other Compliances (If Applicable)
MSME Act: File Form MSME-1.
Companies (Acceptance of Deposits) Rules: File Form DPT-3.
Foreign Contribution (Regulation) Act (FCRA): File Form FC-4.
Non-Compliance Penalties
Non-adherence may lead to penalties and fines by the RoC.
Can result in legal issues and damage the company’s credibility.
Compliances for Non-Profit Companies (Section 8 Companies)
1. Pre-Incorporation Compliances
Before registering a Section 8 Company, the following documents and approvals must be completed:
Memorandum of Association (MoA): Defines the company’s objectives.
Articles of Association (AoA): Sets internal rules and governance framework.
Digital Signature Certificate (DSC): Required for online filings.
Section 8 License: Granted by the Central Government for non-profit operations.
2. Annual Compliances
Meetings
Annual General Meeting (AGM): Within 6 months of the financial year-end.
Board Meetings: At least once every 3 months.
Filings
Form ADT-1: Appointment of auditor, filed within 15 days of appointment.
Financial Statements (Form AOC-4): File within 30 days of AGM.
Annual Return (Form MGT-7): File within 60 days of AGM.
Income Tax Return (ITR-7): Due by 30th September of the following financial year.
Other Obligations
Maintain accurate books of accounts and financial records.
3. Post-Compliance / Tax Benefits
Section 12AA: Registration for income tax exemption.
Section 80G: Enables donors to claim tax benefits for donations.
4. Additional Compliances (If Applicable)
Foreign Contribution (Regulation) Act (FCRA): File Form FC-4 if receiving foreign funds.
MSME Act: File Form MSME-1, if applicable.
Companies (Acceptance of Deposits) Rules: File Form DPT-3, if applicable.
Tax Compliance for Section 8 Companies
Although Section 8 companies are non-profit entities with certain tax benefits, they must adhere to several tax-related obligations to maintain legal compliance and continue enjoying exemptions.
1. Income Tax Compliance
Section 8 companies are eligible for exemptions under Sections 11 and 12 of the Income Tax Act, 1961.
Condition: Income must be applied solely for charitable or religious purposes and cannot benefit individual members.
Income should be utilised for objectives specified in the Memorandum of Association (MoA).
2. 12A Registration
Required to claim income tax exemption on the company’s charitable income.
Granted by the Income Tax Department.
Ensures that the organisation’s income is treated as exempt from tax under Sections 11 and 12.
3. 80G Registration
Optional but highly recommended for donor incentives.
Donors can claim tax deductions on donations made to the Section 8 company.
Encourages contributions towards the company’s charitable objectives.
4. TDS (Tax Deducted at Source) Compliance
Applicable if the Section 8 company makes payments to vendors, contractors, or professionals that attract TDS.
TDS must be deducted at prescribed rates and deposited with the government within the specified deadlines.
5. Goods and Services Tax (GST)
Applicable if the company’s annual turnover exceeds GST threshold limits.
Requires GST registration, periodic filing of GST returns, and compliance with GST regulations.
6. Foreign Contributions (FCRA) Compliance
Applicable if the company receives foreign funding.
Must comply with Foreign Contribution Regulation Act (FCRA) provisions.
Requires FCRA registration for legally receiving and utilising foreign contributions.
7. Form 10BB Filing
Section 8 companies must file Form 10BB with the Income Tax Department.
Includes details of funds received and activities carried out in line with charitable objectives.
8. Audit Requirements
Mandatory annual audit by a qualified Chartered Accountant irrespective of turnover.
Auditor’s report is filed along with the Income Tax Return (ITR-7).
Ensures transparency and validates the utilisation of funds for charitable purposes.
Summary
| Compliance Type | Description | Frequency / Timeline |
|---|---|---|
| 12A Registration | Tax-exempt status | Once (renewal if needed) |
| 80G Registration | Donor tax benefits | Once (renewal if needed) |
| Form 10BB | Fund and activity report | Annually |
| TDS Filing | Deduct & deposit tax | As per payment schedules |
| GST Compliance | Registration & returns | Monthly/Quarterly/Annually |
| Audit | Chartered Accountant audit | Annually |
| ITR Filing (ITR-7) | Income tax return | Annually (30th September) |
If you want, I can also create a complete checklist combining Annual, Event-Based, and Tax Compliances for Section 8 Companies in one table for easy reference. This is very helpful for founders and accountants
Post-Registration Compliance Requirements for Societies in India
After a society is officially registered, it is crucial to follow certain legal and financial compliance procedures to maintain its active status, qualify for tax benefits, and ensure transparency and accountability.
1. Maintain Accurate Financial Records
Societies must keep proper books of accounts, including all receipts, payments, and supporting documents. Accurate record-keeping ensures smooth audits and legal compliance.
2. Conduct Annual Audits
All financial statements of the society should be audited annually by a qualified Chartered Accountant. Audits help maintain financial integrity and accountability.
3. File Annual Returns with the Registrar
Societies are required to submit an annual report, along with audited financial statements and the updated list of members, to the Registrar of Societies as per state-specific regulations.
4. Income Tax Compliance
Section 12A Registration: Societies must file Form 10A with the Income Tax Department to claim tax exemptions on income.
Section 80G Registration: To allow donors to claim tax deductions on contributions, societies should apply for 80G approval, which may need periodic renewal.
5. Renewal of Society Registration
Some states mandate periodic renewal of society registration, particularly if it was initially granted for a fixed term.
6. Foreign Contribution Compliance (FCRA)
If the society receives donations from foreign sources, it must register under the Foreign Contribution Regulation Act (FCRA) and file annual returns to remain compliant.
7. Reporting Changes to the Registrar
Any updates to the governing body, registered office address, or society bylaws must be formally reported to the Registrar to keep the official records current.
Penalties To Be Charged In Case Of Non-Compliance
A firm that fails to comply with the requirements of Section 187 of the Companies Act,2013 will be subject to a fine of ₹5 lakh, and each officer who fails to do so will be subject to a fine of ₹50,000.
Due Dates for Filling Section 8 Company Compliances
Section 8 Company should follow the annual compliances within the below mentioned time:
| Form No | Compliance | Due Date | Last Date |
|---|---|---|---|
| AOC-4 | Directors Report | Within 30 days of the Annual General Meeting | 29 October |
| MGT-7 | Annual Returns | Within 60 days of the Annual General | Meeting 28 November |
| Form ITR -6 | Income Tax Returns | 30 September | 30 September |