Annual Compliances of Section-8 Company

Annual Compliances of Section-8 company:

A section-8 company is registered under the central government and the Ministry of Corporate Affairs. The companies registered under this act apply their profits for the furtherance of social cause and do not pay to their members. Any company whether Private limited, LLP and Public Limited which work for the objective of social welfare without any objective of earning profit or dividend can function as the section-8 company registration.

A section-8 company in India is required to file annual compliance levied by ROC and tax authorities. If a company fails to file the compliances, it may lead to heavy penalties minimum 25000 to 50,0000 rupees. The compliances to be fulfilled to claim such an exemption are:

  • The Section 8 company shall be registered under Section 12A of Income Tax Act with the Principal Commissioner using form 10A
  • It must comply with the conditions specified under Section 11 so as to be eligible for the exemption
  • The company has to be approved under Section 80G through Form 10B

Benefits of filing compliances of section-8 company-:

Transparency in the operation of the company:

Filing annual returns and other such compliances show transparency of the company. It explains the condition of the company and the annual financial transactions in a clear way.

Legal Penalties for non- compliance:

If a company fails to file the compliances, it may lead to heavy penalties of a minimum of 25000 to 50,0000 rupees. Hence, it’s always advisable to meet the compliances on time to avoid any legal complications in the future.

Build trust:

Whether it is a customer or vendor or supplier or the regulatory body, everybody trusts those companies who file compliances on time and are quite open about their financial details. Such companies have betters credibility; and hence, find it easy to build trust among everybody.

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Documents required for filing annual compliances of section-8 company-:

  • The Identification proofs of the directors
  • The Pan cards of the directors
  • Memorandum of association
  • Articles of Association
  • An estimate for future annual income and expenses for the next 3 years.