Question 1

What are the event-based compliance requirements?

Accepted Answer

These depend on specific events, such as:

Changes in directors or shareholders.

Alterations to MoA or AoA.

Acquisition or disposal of property.

Borrowing or lending money.

Question 2

What are the reporting requirements?

Accepted Answer

Companies must submit various reports to the Registrar of Companies (ROC) and other regulatory bodies, including:

Annual reports.

Auditor reports.

Financial statements.

Tax returns.

Question 3

What are the record-keeping requirements?

Accepted Answer

Companies must maintain and preserve various records, including:

Minutes of meetings.

Financial records.

Statutory registers.

Correspondence.

Question 4

What are the consequences of non-compliance?

Accepted Answer

Non-compliance can lead to:

Penalties and fines.

Legal action.

Reputational damage.

Cancellation of registration.

Question 5

Can Section 8 companies claim full tax exemption?

Accepted Answer

No, Section 8 companies, also known as not-for-profit companies, are not eligible for full tax exemption. While they do enjoy certain tax benefits under the Income Tax Act, they are not exempt from paying taxes altogether. For more detailed information get on call with our tax experts today.

Question 6

What happens if I don’t file my annual returns?

Accepted Answer

Failing to file annual returns can lead to penalties and legal consequences for a Section 8 company. The Registrar of Companies (RoC) requires these companies to file their annual returns within the stipulated time frame.

Question 7

Is GST applicable to a Section 8 company?

Accepted Answer

Yes, the Goods and Services Tax (GST) is applicable to Section 8 companies like any other entity engaged in providing taxable goods or services. However, certain activities of Section 8 companies may be exempt from GST, depending on the nature of their operations and the specific exemptions provided by the tax authorities.

Question 8

What is the annual compliance charge for a Section 8 company?

Accepted Answer

The annual compliance charge for a Section 8 company can vary and depends on several factors, including the company's authorised capital, paid-up capital, and the state in which it is registered. Additionally, there may be additional charges for late filing or other specific compliance requirements. It is best to consult with a professional chartered accountant or company secretary to determine the exact compliance charges for a particular Section 8 company.

Question 9

What are the annual compliance requirements?

Accepted Answer

Annual compliances include:

Appointing an auditor and filing Form ADT-1.

Maintaining accurate books of accounts.

Conducting Annual General Meetings (AGMs) and Board Meetings.

Filing financial statements (AOC-4) and annual returns (Form MGT-7).

Filing income tax returns (ITR-7), even if exempt from tax.

Question 10

What is the limit of Section 8 company audit?

Accepted Answer

As per the Companies Act, 2013, a Section 8 company is required to get its accounts audited annually. The audit is mandatory, regardless of the company's turnover or financial performance. There is no specific turnover limit for the audit of a Section 8 company; all such companies must undergo an annual audit.

Question 11

What is the exemption for Section 8 companies?

Accepted Answer

Section 8 companies, being not-for-profit organisations, may be eligible for certain exemptions under the Income Tax Act, 1961. These exemptions are typically related to their income, and they need to fulfil specific conditions to avail of such benefits. Consulting our tax advisor is recommended for specific guidance on tax exemptions for a Section 8 company.

Section 8 Company Compliance

FAQ's on Section 8 Company Compliance

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