Section 8 Company Compliance Checklist
SECTION 8 COMPANY COMPLIANCE CHECKLIST
Entity: {{client_name}} · PAN: {{trust_pan}} · Year ended: {{period_end}}
A Section 8 company is licensed under Section 8 of the Companies Act, 2013 to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or similar objects, on the condition that it applies its profits (if any) solely towards those objects and pays no dividend to its members. This checklist documents the auditor's test of continued compliance with that licence.
A. Licence and Registration
| Test | Result / Reference |
|---|
| Section 8 licence (Form INC-16) current and on file | |
| Memorandum objects clause consistent with the licensed objects | |
| Name ends in a permitted suffix (Foundation, Forum, Association, etc.) without "Limited/Private Limited" per Rule 8(7), Companies (Incorporation) Rules | |
| 12A/12AB and 80G registration status (if claiming income-tax exemption) verified separately | |
B. Profit-Application Restriction
Section 8(1)(b)/(c) prohibits payment of any dividend to members and requires all profits, income and other income to be applied only towards promoting the licensed objects.
| Test | Result / Reference |
|---|
| No dividend declared or paid to any member during the year | |
| Surplus for the year applied towards, or carried forward for, the licensed objects only | |
| No distribution of assets to members on any reduction of capital or otherwise during the year | |
| Remuneration to directors/managerial personnel, if any, reasonable and disclosed — not a disguised profit distribution | |
C. Governance and Filing Compliance
| Test | Result / Reference |
|---|
| Board composition and meeting frequency per the licence conditions/AOA | |
| AOC-4 and MGT-7/7A filed for the year, licence-condition-specific disclosures included | |
| CSR applicability tested independently if the company also meets Sec 135 thresholds as a company (rare, but not automatically exempt merely for being Sec 8) | |
D. Conversion and Revocation Triggers
The Central Government (via the Registrar) may revoke the Section 8 licence under Sec 8(6) if the company's objects have contravened the licence conditions, or are conducted fraudulently, or in a manner prejudicial to public interest. A Section 8 company can also voluntarily convert to a company of another kind, but only after satisfying the special resolution and prior Central Government approval conditions under Rule 21/22, Companies (Incorporation) Rules 2014 — including a declaration that no unspent CSR/other restricted funds remain unaccounted for.
| Test | Result / Reference |
|---|
| No activity identified during the year contrary to the licensed objects | |
| No indication of fraud or conduct prejudicial to public interest | |
| If conversion is contemplated: special resolution + Central Government approval process status | |
E. Conclusion
Overall conclusion on continued compliance with the Section 8 licence conditions for the year: ____________________________________________
Prepared by: __________ Date: 31 July 2026 Reviewed by: __________ Date: ____________
