Section 8 Company Compliance
According to the Companies Act, 2013, it is mandatory for all Section 8 Company Companies to file the Section 8 Company Compliance with the MCA or Ministry of Corporate Affairs. The main aim to start Section 8 Company is to encourage, promote, and nourish the activities related to science, art, sports, charitable activities, commerce, and so on. Section 8 Companies fall under the Non-Governmental Organization category. These companies enjoy being treated as ‘Limited Company’, via, word ‘Limited’ but it is not added at the end of the name of the company. In short, Section 8 companies work with the objective to promote the needy sectors and communities in India. These Companies are not applicable to provide income or dividends to their partners or members.
What are Section 8 Companies?
An Annual Compliance for Section 8 Company is formed with the objective of promoting commerce, arts, science, sports, education, research, social welfare, and protection of the environment in a country. Though they're authorized to run a business and earn a profit, the profit can only be utilized for meeting company objectives, and can't be shared among the members.
The Advantages of Section 8 Company Compliance
- Provides the company better credibility or trustworthy
- Protects the company from all types of legal trouble
- Help the company in eluding penalties and punishments
- Work with the objective to form trust among its customers
What are the Tax Compliances for a Section 8 Company?
A Section 8 company is liable to pay corporate tax as prescribed by the Income Tax Act. But, it can claim certain income to be excluded in calculating the entire income which is applicable to tax. The compliances to be fulfilled to claim such an exemption are:
The Section 8 company shall be registered under Section 12A of the tax Act, with the Principal Commissioner using form 10A.
It must suit the conditions specified under Section 11, so on be eligible for the exemption.
The company has got to be approved under Section 80G, through Form 10B.
Penalties for Non-Compliance
- The Ministry of Corporate Affairs has set up a penalty for section 8 Company not complying with the procedures:
- The Central Government may revoke the license granted to the corporate if it finds that the corporate is functioning fraudulently or during a manner violative to the thing of the corporate.
- The companies will be punishable with a fine, which shall not be less than ten lakh rupees and can be extended to one crore rupees.
- The directors and each officer of the corporate who is in default shall be punishable with imprisonment for a term which can reach twenty-five lakh rupees or with both.
- If it's found that the affairs of the corporate were conducted fraudulently, every officer in default shall be responsible for action under section 447.
Not convinced with the registration of company and more comfortable in the partnership firm of business?
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At Compliance Calendar, we have registered hundreds of LLPs across India and specialise the LLP Registration as well as its annual compliance.What is important to note here is that Like Companies, LLPs do not have MOA & AOA and instead, an LLP Agreement is executed post LLP Incorporation.
The amount of stamp paper to be bought shall be based on the capital contribution by partners of LLP and it varies from one state to another state based on their State Stamp Act.
We at Compliance Calendar can help you register your LLP hassle free as we have registered LLPs across India.LLP Firm Registration
NBFC ComplianceNBFC or Non-Banking Financial Companies or NBFCs are companies that are involved in the business of receiving deposits, advances, and loans, and acquisition of stock, shares and bonds, debentures, and securities that granted by the govt and are registered under the businesses Act 2013.
To make the process easy, get guidance from our expert team!What is NBFC?Non – Banking Financial Companies are the financial institutions that provide banking services, but don't hold any banking license.
A Non-Banking Institution has the principal business of receiving deposits under any scheme or arrangement or in the other manner.
The company fulfilling both these criteria than that company is eligible for registering as NBFC by RBI.
Reserve Bank of India Act, doesn't define the term ‘principal business’, however, RBI has defined that only companies which are mainly engaged in financial activity get registered with RBI and are regulated and supervised by it.
Hence, therefore if the companies engaged in agricultural operations, purchase and sale of goods, sale or construction of the immovable property, industrial activity, as their principal business and are doing some financial business during a small way, these don't fall into the category which may be regulated by the Reserve Bank[1].Different Categories of NBFCs Registered with RBICategories of NBFCs are often differentiated in terms of sorts of liability, like Deposit and Non – Deposit accepting.Types of NBFCs or Non-Banking Financial CompaniesThe types of NBFC or Non-Banking Financial Companies on the basis of Liabilities andActivities are mentioned below:NBFCs based on LiabilitiesDeposit Accepting NBFCs;Systematically Important (NBFC-ND-SI);Non-Deposit Accepting NBFCs;Other Non-Deposit Holding Companies;NBFCs based on ActivitiesInvestment and Credit Company (ICC);Infrastructure Finance Company (IFC);Systemically Important Core Investment Company (CIC);Mortgage Guarantee Companies;NBFC- Non-Operative Financial Holding Company (NOFHC);NBFC- Microfinance Companies (MFIs);NBFC-Factors;Infrastructure Debt Fund Non-Banking Financial Company (IDF-NBFC)Checklist for NBFC- D(Deposit-taking)In contrast to Non-deposit NBFCs, NBFC-D (Deposit Taking ) institutions need to file a couple of returns on the idea of deposits held by the corporate.NBS 1- Quarterly returns on Deposits in First ScheduleNBFC-D type institutions need to submit quarterly returns on Prudential Norms.
