As a Section 8 company, you have a unique set of regulations and best practices that you need to follow to ensure compliance. These regulations are in place to protect your organization, your stakeholders, and your beneficiaries.
However, staying compliant can be a tough task, especially if you're new to the world of Section 8 companies. That's where this guide comes in.
We've put together a comprehensive resource that covers everything you need to know about Section 8 company regulations and best practices. From understanding the Section 8 company registration process to maintaining compliance with the Companies Act, we've got you covered.
So, whether you're a seasoned Section 8 company or just starting out, this guide will help you navigate the complex world of regulations and best practices with ease.
What is Section 8 Company?
In our country, a Section 8 company is a non-profit organisation that has the purpose of promoting science, commerce, social welfare, and research, as well as environmental preservation. With authorization, you may run your business and amass profits. However, you cannot divide the same amongst the members of your firm.
Every Section 8 company is required to carry out the annual compliance activities outlined under the Companies Act of 2013 and the Income Tax Act of 1961. This protects the company's credibility and trustworthiness while avoiding fines for noncompliance. For instance, compliance duties that must be completed throughout the year might be tedious or painstaking. Nonetheless, in cases of non-compliance, it might lead to heavy penalties, challenging the director’s position in the firm.
Corpseed's yearly compliance package for Section 8 Companies guarantees that these responsibilities are handled by specialists for you. It saves you time and energy, allowing you to focus on the company's essential tasks.
Annual compliance Section 8 companies
It is mandatory for all Section 8 companies to file annual compliance and other tax-related returns. Failing will lead to heavy penalties for your Company in the Defaulter list of ROC. The next step is to understand the key features for the annual compliance for Section 8 Company:
- Maintain Accounts and Prepare financial statements: - The Company is required to have statutory registers, including records of loans acquired, and incurred charges.
- Annual returns: - The annual returns should have information and details, such as about management, and stakeholder details to be filed in Form MGT-7 with the Registrar of Companies (ROC), within 60 days of the annual general meeting.
- Income tax return: - The income tax return has to be filed each year on or before the 30th of September.
- Annual General Meeting: - Annual general meeting is conducted once a year within 6 months of the end of the financial year along with other board meetings.
- Appointment of Auditor: - It is said that as per Section 139, it is essential for the Companies Act to appoint an auditor. It requires the existence of a statutory auditor, who would audit the book of accounts or annual audits of the company, as per this tenure till 5 years.
- Filing Financial Statement: - The financial statement needs to be filed in a form (E-FORM AOC-4), following 30 days from the date of the announcement of the annual general meeting.