CS Karan B. Khattri
A Section 8 company is almost identical to a Society or a Trust. It is registered with the Ministry of Corporate Affairs (MCA). A company registered with section 8 has quite a lot of advantages like better legal standing; improved recognition and the donors, as well as stakeholders, consider it much more reliable as compared to a Trust or a Society. The company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies. Its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object.
WHO CAN APPLY FOR REGISTRATION OF A SECTION 8 COMPANY
Any person or an association of persons intending to register a limited liability company for objects specified below can opt to apply for registration of Section 8 Company. The following have to be proved to the satisfaction of the Central Government that:
(a) its objects includes promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
(b) the company after incorporation intends to apply its profits, if any, or other income in promoting such objects only; and
(c) the company intends to prohibit the payment of any dividend to its members.
MANDATORY COMPLIANCE LIST FOR SECTION 8 COMPANY
DISCLOSURE OF INTEREST BY DIRECTOR (SECTION184(1))
Every director shall at the first meeting of the Board in which he participates as a director and thereafter at the first meeting of the Board in every financial or changes in his interest.
DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR(SECTION164(2)
Every Director of the Company in each Financial Year will file non-disqualification.
KYC OF DIRECTORS(RULE 12A)
All the Directors of the Company shall file this form on or before 30th September every year.
ANNUAL FORM (AOC-4)
Company is required to file its Balance Sheet along with the Statement of Profit and Loss Account, Cash flow statement, Directors’ Report and Auditors’ Report in this form within 30 days of holding of the Annual General Meeting.
ANNUAL RETURN(MGT-7)
Every Company will file its Annual Return within 60 days of holding of the Annual General Meeting.
BOARD MEETINGS
In view of exemption notification read with section 173(1), section 8 companies are required to have at-least one meeting within every six calendar months.(Only 2 Meeting within Financials year)
NOTICE OF AGM
Section 8 Company can hold a meeting with minimum 14 days’ notice as against 21 days’ notice otherwise applicable under section 101 (1) of Companies Act.
NO OF DIRECTORS
The prescription under section 149(1) of Companies Act 2013 as to having Minimum of three directors for public limited company and two directors for private limited company and maximum of fifteen directors is not applicable to section 8 company and thus there is no prescription with respect to minimum or maximum directors in a section 8 Company
QUORUM FOR BOARD MEETINGS OF SECTION 8 COMPANIES
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.
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