Explore the essential requirement of AOC-4 filing for Section 8 companies in our latest blog. Uncover the key deadlines, potential penalties, and the crucial role this form plays in maintaining transparency and compliance.
The filing of the AOC-4 Form is a mandatory requirement for Section 8 companies, serving as the official avenue for submitting annual financial statements. Notably, this crucial filing must be completed within 30 days from the Annual General Meeting (AGM) date. Failure to adhere to this deadline incurs penalties for non-compliance. The significance of this process lies in its role in officially recording the company’s financial records, making them accessible for regulatory scrutiny. This not only ensures transparency but also ensures compliance with the stipulations outlined in the Companies Act, 2013 underscoring the importance of timely and accurate financial reporting.
With Vakilsearch’s annual compliance program for Section 8 Companies, you can be sure that all your compliance tasks are handled professionally on your behalf. Your time and effort are saved, allowing you to concentrate on the core of your business.
Is AOC 4 Applicable for Section 8 Companies?
The revenue of NPO must be used for benevolent goals rather than for the payment of dividends to the organisation’s shareholders. These businesses are required to abide by the government’s standards and receive a certificate of incorporation from the national government.
By the regulations, the NPO may be shut down on the Central Government’s orders if the obligations stipulated therein are not met. In addition, stern legal recourse will be taken against each of the firm’s members if the goals set forth by the company turn out to be false.
The annual compliance requirements outlined by the Companies Act of 2013 and the Income Tax Act of 1961 must be completed by every Section 8 company. By doing this, the business maintains its reliability and credibility while avoiding sanctions for non-compliance. Throughout the year, compliance duties must be completed and might be onerous.
Advantages of Annual Compliance for Section 8 Companies
- Regular compliance enhances the Section 8 Company’s credibility or dependability
- Additionally, it aids Section 8 Company’s efforts to raise money for charitable organisations.
- Additionally, the regular filing of annual returns maintains the organisation’s ongoing existence
- Being compliant and following the annual compliance requirements may shield the business from facing various legal issues
- Additionally, it assists the Section 8 enterprise in defending itself against fines and penalties
- The major goal of a Section 8 enterprise is to build client trust, and submitting annual returns on time, helps the company accomplish this goal.
Keeping Up with Statutory Registers
The statutory records must be kept in the registers by all Section 8 Companies. The register includes information about members, loans, investments, fees, etc. Additionally, it gives a general summary of how effectively the company operates each year. Vakilsearch experts are ready to guide you through the entire process from the comfort of your home.
Tasks for Annual Compliance
The annual compliance responsibilities for Section 8 Companies are as follows. The compliance package includes each of them.
- Requirement of Auditor: The Corporations Act of 2013’s Section 139 makes the employment of an auditor, a requirement for all companies
- Keeping a Register: By Section 8 of the Companies Act, 2013 the company is required to keep a statutory register listing its members, loans acquired, charges created, and other information
- Convening Meetings: It is required to have annual general gatherings and other statutory meetings
- Annual Report: Directors of the company are required to file an annual report that includes financial information and information on their corporate social responsibilities. This report is the board directors’ responsibility, and Vakilsearch is ready to assist you with it
- Company’s Financial Statement: The company’s previous fiscal year’s financial statements, profit and loss statement, statement of cash flow and other financial documents must be filed.
Financial Statements Submission (AOC-4 for Section 8 Companies)
A copy of the accounting records in the required format, i.e., the e-form AOC-4, must be filed by each Section 8 Company. Within thirty days after the date of the most recent annual general meeting, the financial information must be filed. Vakilsearch has expertise in aiding Section 8 businesses with appropriately completing forms and annual returns, ensuring that any data submitted to departmental and ministry websites is acceptable.
Total Meetings and Quorum for the Board
According to the exemption notifications read with Sections 173(1) and 174(1), Section 8 corporations are required to hold at least one meeting every six calendar months, and the quorum for board meetings is eight directors or one-fourth of their total number of shareholders, whichever is lower. However, the quorum must consist of a minimum of two people.
MGT-7, Annual Returns Filing With ROC
Section 8 Corporations must additionally submit Form MGT-7 to the ROC for submitting the company’s annual returns because they are established as limited companies. Within sixty days of the most recent annual general meeting, MGT-7 must be submitted.
Penalties for Non-Compliance
Non-compliance may result in fines between ₹25,000 and ₹500,000 and/or incarceration. Additionally, it may result in the corporation and its executives being placed on a temporary blacklist. If any procedure is not followed, the Ministry of Corporate Affairs (MCA) has the authority to apply certain fines. The following are the potential penalties:
The directors of the Organisation who is in default will be subject to a term of imprisonment and a fine that may be increased to ₹25 lakhs or both; on the occasion that it is discovered that the Organisation’s issues were aimed falsely. The Central Government may revoke the permit granted to the Organisation on the off-chance that it manages to find that the Organisation is working inaccurately or in a way that violates the Organisation’s objectives.
Conclusion
A Section 8 compliance company may further be required to complete other compliance duties in addition to the list of yearly compliance requirements indicated above, depending on the circumstances. Such tasks include:
- Form DIR 2, the director’s authorisation to occupy the premises within 30 days after the appointment of the director
- Within 60 days of the appointment of a manager, managing director, or other key managerial personnel, submit the form (Form MR-1).
Vakilsearch has experience working with numerous Section 8 compliance companies and has expertise in their needs. So what are you waiting for? Connect with Vakilsearch and get filing forms and annual returns accurately, ensuring the acceptability of any information submitted to department and ministry websites.
Read more,
- Requirements for Section 8 Company
- Procedure for Closure of Section 8 Company
- What Documents Do I Need to Apply for Section 8?
Frequently Asked Questions
Is AOC 4 applicable for Section 8 companies?
Section 8 companies must submit the AOC-4 Form, which is required for filing annual financial statements.
Which company is required to file AOC 4?
Section 8 companies, also known as non-profit organisations, are required to file the AOC-4 Form. It is a part of the annual compliance and is essential to be filed on time. Compliance with this filing requirement ensures transparency and accountability in the financial reporting of Section 8 companies.
Which form is applicable to Section 8 company?
The applicable form for Section 8 companies is the AOC-4 Form, which they must file to submit their annual financial statements to regulatory authorities.
What are the annual compliances for Section 8 companies?
Annual compliances for Section 8 companies include filing the AOC-4 Form, holding board meetings, and maintaining statutory registers.
What are the exemptions available to Section 8 companies?
Section 8 companies enjoy exemptions from certain provisions of the Companies Act,2013 such as restrictions on dividend distribution and the requirement for a minimum paid-up capital. These exemptions facilitate their non-profit activities and promote their social objectives.
Which section is not applicable to Section 8 company?
A section 8 corporation is not subject to Section 165(1), which sets a maximum of twenty companies for the number of directorships a person may hold, including alternate directorships.
What happens if AOC-4 is not filed?
Failure to file the AOC-4 Form by a Section 8 company can result in penalties and legal consequences, including fines and disqualification of directors. Timely submission of the AOC-4 Form is crucial for maintaining compliance and transparency in financial reporting.
When should AOC-4 be filed?
Section 8 companies are required to file the AOC-4 Form within 30 days from the date of the Annual General Meeting (AGM). This timeline ensures timely submission of their annual financial statements to regulatory authorities.
Is audit mandatory for Section 8 companies?
While audit is not mandatory for small Section 8 companies meeting specific criteria, larger Section 8 companies with higher turnover or capital may be subject to mandatory audit requirements. Compliance with audit standards enhances transparency and credibility in financial reporting for Section 8 companies.
