Section 8 continues to provide for restriction on application of profits and permits the same only for the purpose for which the company is promoted, prohibits declaration of dividend, continues to permit partnership firms to be a member of section 8 companies etc.
♦ Three Key Features of a Section 8 Company
1. 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.
2. Limited liability: Members of these companies can only have limited liability. Their liabilities cannot be unlimited in any case.
3. Limited liability: Members of these companies can only have limited liability. Their liabilities cannot be unlimited in any case.
♦ Annual Compliance Tracker for Section 8 Companies:
Annual Filling is a mandatory for every company, including Section 8 Companies, incorporated in India. The E-form filing along with the required documents must be filed with MCA/ROC.
1. Appointment of an Auditor: Under Section 139 of the Companies Act 2013, it is mandatory for companies to appoint an auditor.
2. Maintenance of a Register: The Company shall maintain a statutory register consisting of loans obtained, charges created, its members, etc as enumerated under Section 8 of the Companies Act, 2013.
3. Convening Meetings: Annual general body meetings and other statutory meetings have to be conducted.
4. Report by Directors: Directors of the company shall file their annual report, consisting of fiscal data and corporate social responsibilities, in an appropriate manner.
5. Financial Statement of the Company: The balance sheet, profit and loss A/C, cash flow statement, and other financial statements to be filed by the company for the previous financial year.
7. Section 149 not applicable: Section 8 Companies are not under obligation to appoint an independent director and are free from all the consequential provisions concerned with Independent directors.
8. Board of Directors Meeting: In view of exemption notification read with section 173(1), section 8 companies are required to have atleast one meeting within every 6 calendar months.
9. Quorum for board meetings: As per section 174(1) read with exemption notification, quorum for board meetings of section 8 companies is eight directors or 25% of its total strength, whichever is lower. However, the quorum shall not be less than two members.
♦ Annual Filings:
|Form No.||Compliance||Due Date|
|AOC-4||Filing of Financial Statements||Within 30 days of the Annual General Meeting|
|MGT-7||Annual Return||Within 60 days of the Annual General Meeting|
|ADT-1||Appointment of Auditor||Within 30 days of the Annual General Meeting|