Section 8 company is a legal entity specially designed keeping in view the objective of charitable trust for social welfare without any intention to grab any kind of profit or dividend. Not every company is formed with primary motive of earning maximum profit, there are few organizations specially established to fulfill charitable and Non profit organizations.
In India following three forms of Non profit Organizations are widely practiced-
Companies Act, 2013 and Companies (Incorporation) Amendment Rules, 2019 regulates all rules and regulations for incorporation of sec 8 companies in India.
In simple words, section 8 Company is a legal entity for non-government or non-profit organizations. Once the company gets registered successfully on Ministry of Corporate (MCA) site, there are some post incorporation compliance for Sec 8 Company to be complied. Non compliance of same shall attract penal provisions and even suspension of license in certain cases. Thus Section 8 company post registration shall comply with compliances.
No doubt Sec 8 company enjoys lot of benefits and exemptions from government still there are some common post incorporation compliances that needs to be mandatorily followed by sec 8 company too. Here are some major post incorporation compliance check list for Sec 8 Company as non-compliance of which may attract various penal provisions as per Companies Act, 2013.
Form No | Compliance | Due Date |
MGT-15 | Annual General Meeting | 30th September |
AOC-4 | Directors Report | Within 30 days of the Annual General Meeting |
MGT-7 | Annual Returns | Within 60 days of the Annual General Meeting |
Form ITR -6 | Income Tax Returns | 30th September |
After formation of Sec 8 comapny, the first and foremost step is opening of Bank Account in the name of the Company. Opening of bank account may require following documents-
Section 173(1), of The Companies Act 2013 deals with conduct of Board meeting of the companies. As per the provisions of the section, Sec 8 company shall within 30 days from the date of its incorporation conduct first board meeting of the company. Directors can attend the meeting either in person or through video conferencing.
Once bank account is opened, the next compliance by sec 8 company is of depositing the share capital money in the bank account within 180 days from the date of incorporation of the company.
Sec 8 company is under obligation to issue share certificates to the shareholders of the company within 60 days from the date of incorporation of the company and pay stamp duty within 30 days from the date of allotment of shares as per the relevant stamp act applicable on the state.
As per Section 12(1) of the Companies Act, 2013 a sec 8 company should have its registered office within 15 days from the date of incorporation of the company. This address should be used for all types of future communications from various authorities.
As per Section 139 of the Companies Act, 2013 every company is required to appoint its first auditor within 30 days of incorporation by its board of directors and in case the board of directors fails to appoint the auditor within said period of 30 days then they shall call an extraordinary general meeting of shareholders for appointing an auditor. The appointment of auditor through shareholder must be completed within 90 days.
On registration of sec 8 company, every sec 8 company having its office all over India should affix its name at every place from where it is carrying on business.
Section 12 mandate sec 8 company to print the following information on all its Business Letterhead / Billheads/Letter Papers etc.
At First board meeting, every director is under obligation to disclose his interest in any company/firm/body corporate/association of individuals as outlined in section 184(1) of the Companies Act 2013. Any changes in the disclosures shall be intimated by the director to board of directors in its first meeting held during each financial year. An independent director, if any, must give a declaration that he meets the criteria of independence during the first board meeting as a director.
It is mandatory as a post incorporation compliance for Sec 8 Company to maintain following statutory registers at the registered office of the company–
As a post incorporation requirements of a company, every sec 8 company is required to file a declaration of commencement of business within 180 days from the date of incorporation of the company in accordance with the Companies (Amendment) Ordinance 2018, Section 10A, in form INC-20A.
As per section 128, every sec 8 company shall maintain proper books of accounts which shall represent true and fair view of the financial disclosure of the company.
As a post Incorporation Compliance for sec 8 Company, the next important step is obtaining shop act license immediately. The basic documents for obtaining shop act license is MOA, AOA, COI, Directors KYC documents etc.
It is mandatory to obtain Professional Tax registration to sec 8 company and all directors, all designated partners and all employers. However, all Union Territories including NCT of Delhi and certain states like Haryana, Punjab, Rajasthan, Uttar Pradesh etc. does not have any law to tax profession.
Sec 8 Companies should make immediate provisions for safeguarding interest of trademark, copyrights, patents rights by making an application of trademark at Trade Mark site Application of trademark is not mandatory for Sec 8 Company but it is strongly recommended to apply for registered trademark owing to its huge legal infringement of rights benefits.
Company is under obligation to comply with basic legal framework. Post Incorporation Compliance for Sec 8 Company is most essential and basic need from compliance view in order to avoid monetary as well as non-monetary penalties.