Annual Compliance for Section 8 Companies
Every Section 8 company has to carry out the annual compliance tasks listed under the Companies Act, 2013 and Income Tax Act, 1961. This ensures that the company is trustworthy and credible while avoiding penalties for non-compliance. Compliance tasks need to be carried out throughout the year and can be tedious.
Benefits of Being Compliant
- Increases the credibility of the company
- Builds trust
- Helps avoid legal complications
- Avoid paying penalties
Annual Compliance Tasks
The following are the annual compliance tasks required to be carried out by Section 8 Companies. All of these are included in the compliance package.
- Appointment of an Auditor: Under Section 139 of the Companies Act 2013, it is mandatory for companies to appoint an auditor. We will appoint an auditor for you.
- Maintenance of a Register: The company shall maintain a statutory register consisting of loans obtained, charges created, its members, etc. as enumerated under Section 8 of the Companies Act, 2013.
- Convening Meetings: Annual general body meetings and other statutory meetings have to be conducted.
- Report by Directors: Directors of the company shall file their annual report, consisting of fiscal data and corporate social responsibilities, in an appropriate manner. The board directors are responsible for this report.
- Financial Statement of the Company: The balance sheet, profit and loss A/C, cash flow statement, and other financial statements to be filed by the company for the previous financial year.
- Tax Returns: At the end of every assessment year, before the 30th of September, tax returns are to be filed.
- Filing of Financial Statements: The financial statement shall be filed in the appropriate form (E-FORM AOC-4) within 30 days from the last general body meeting.
- Filing Returns: Companies need to file Form MGT-7 with the Registrar of Companies (RoC), for filing returns within 60 days of the annual general meeting.
Apart from the list of annual compliances mentioned above, find here other compliance tasks depending on the situation. Examples of such tasks are:
- Director’s consent form (Form DIR 2) to occupy the office within 30 days from the director’s appointment
- Returns form (Form MR-1) within 60 days from the appointment of a managing director, manager, or other key managerial posting
In case your company takes donations or funding from donors, then those incomes are eligible for tax exemptions. To claim that exemption, the company has to comply with certain conditions. Those are specified under Section 11 and register under Sections 80G and 12A.
Penalties for Non-compliance:
Non-compliance may lead to penalties ranging from ₹25,000/- to ₹5,00,000/- and/or imprisonment. It leads to the company and its directors being blacklisted for some time.
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