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Section 8 Company Annual Compliance: Step-by-Step Process for NGOs & Non-Profits

Written by

Financial Analyst

in

Introduction

A Section 8 Company—formed for charitable, social, religious, educational, or non-profit objectives—must comply with all annual filing and regulatory requirements under the Companies Act, 2013. Even though these companies operate without profit motives, they must maintain full transparency and timely financial reporting.

Failure to comply with annual requirements can lead to penalties, loss of credibility, and even cancellation of Section 8 license.

To support NGOs, foundations, and non-profit institutions, Saving Mantra offers a structured and compliance-first process for all Section 8 Company annual filings.

Why Annual Compliance Is Important for Section 8 Companies?

Annual compliance ensures:

  • Financial transparency
  • Legal recognition and credibility
  • Donor confidence and trust
  • Smooth grant applications
  • Avoidance of penalties & legal notices
  • Continued eligibility for Section 8 license

A disciplined compliance process strengthens long-term sustainability and trustworthiness.

Step-by-Step Process for Section 8 Company Annual Compliance

Step 1: Understanding Annual Compliance Requirements

Section 8 companies must file the following every year:

  • MGT-7 – Annual Return
  • AOC-4 – Financial Statements
  • ADT-1 – Auditor Appointment
  • DIR-3 KYC – Directors’ KYC
  • Income Tax Return (ITR-7)
  • Conduct minimum number of Board Meetings
  • Maintain statutory registers and records

Saving Mantra creates a compliance calendar tailored for each client.

Step 2: Collection of Financial & Operational Data

We gather:

  • Receipts & payments
  • Grants received
  • Donation records
  • Bank statements
  • Fixed assets details
  • Expenses & invoices
  • Minutes of meetings
  • Utilization statements

Accurate data ensures error-free filings.

Step 3: Preparation of Financial Statements

Our team prepares:

  • Income & Expenditure Account
  • Receipts & Payments Account
  • Balance Sheet
  • Schedules & Notes to Accounts

These documents must follow applicable accounting standards for non-profit entities.

Step 4: Statutory Audit by Chartered Accountant

Audit is mandatory for all Section 8 companies.

The auditor will:

  • Verify books of accounts
  • Check grant utilization
  • Ensure donations are recorded correctly
  • Review statutory registers
  • Issue the Audit Report

Saving Mantra coordinates complete audit support.

Step 5: Filing ADT-1 (Auditor Appointment)

Every Section 8 company must file ADT-1 annually to confirm the auditor’s appointment or reappointment.

  • Filed within 15 days of AGM
  • Requires board and member approval

Step 6: Filing AOC-4 (Financial Statements)

After the audit is completed, AOC-4 is filed with MCA.

Includes:

  • Audited financials
  • Board Report
  • Auditor Report
  • Notes to accounts

Deadline: Within 30 days from the date of AGM

Step 7: Filing MGT-7 (Annual Return)

MGT-7 contains:

  • Details of members & shareholders
  • Management & governance details
  • CSR activities (if applicable)
  • Meeting details

Deadline: Within 60 days from the date of AGM

Step 8: Filing DIR-3 KYC for Directors

Every director must complete KYC annually.

  • Mandatory even if the company is inactive
  • Helps maintain active DIN status

Step 9: Conducting Board Meetings & Maintaining Minutes

Section 8 companies must hold at least:

  • 2 Board Meetings per year,
    with a gap of not more than 120 days.

We prepare:

  • Notices
  • Agenda
  • Resolutions
  • Minutes

Step 10: Income Tax Return Filing (ITR-7)

Section 8 companies must file ITR-7 annually.

Includes:

  • Grant utilization
  • 80G/12A compliance
  • Donation receipts
  • Financial statements

Saving Mantra ensures full tax compliance for non-profits.

Step 11: Updating Statutory Registers

We update:

  • Register of members
  • Register of donations
  • Register of directors
  • Books of accounts

This documentation is essential for audits and funding applications.

Step 12: Compliance Reporting & Dashboard Updates

We provide:

  • Filing acknowledgments
  • Complete compliance report
  • Audit documents
  • Dashboard summary for annual compliance status

This helps NGOs maintain transparency for donors and authorities.

Benefits of Saving Mantra Section 8 Annual Compliance Services

  • Complete ROC, MCA & IT Return compliance
  • High accuracy in reporting and documentation
  • Donor-friendly financial statements
  • Audit-ready workflow
  • Dedicated compliance specialist
  • Automated deadline tracking

Conclusion

Annual compliance is crucial for Section 8 companies to maintain accountability, transparency, and government recognition. A structured and timely compliance process helps NGOs avoid penalties and increases donor trust.

The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances. All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.

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