Due Date for Tax Audit and ITR Filing further extended to 31th October 2018

CBDT further extends due dt for filing of IT Returns & audit reports from 15th Oct,2018 to 31st Oct, 2018 for all assessees liable to file ITRs for AY 2018-19 by 30.09.2018,after considering representations from stakeholders. Liability to pay interest u/s234A of ITAct will remain

— Income Tax India (@IncomeTaxIndia) October 8, 2018

Due Date for Tax Audit and ITR Filing extended to 15th October 2018

CBDT extends due dt for filing of Income Tax Returns & audit reports from 30th Sept,2018 to15th Oct, 2018 for all assessees liable to file ITRs for AY 2018-19 by 30.09.2018,after considering representations from stakeholders. Liability to pay interest u/s234A of ITAct will remain

— Income Tax India (@IncomeTaxIndia) September 24, 2018

Advance Tax Reminder

15th September (Saturday) is the due date for Second Installment of Advance Tax for FY 2018-19. You must pay 45% of your tax liability for AY 2019-20 before this date to avoid interest penalty u/s 234A

Who needs to pay Advance tax?

·         Business owners, Freelancers & Professionals

·         A salaried individual who earns income by way of house rent, bank interest or capital gains

·         Traders trading F&O and stocks.

·         Assessees opting for Presumptive Taxation Scheme need to pay 100% advance tax liability in a single installment on or before 15th March 2019

How do you pay?

You can pay advance tax online as well as offline.

Online payment: To pay it online, you can login to the income tax website and click on the “e-Payment of Taxes” tab, which will direct you to the payment website. You can also get to the tax payment website directly at tin-nsdl.com. Here, under the “Services” tab, you will find the “e-payment” option where you can pay your tax. To pay advance tax, select Challan 280. Once you put in the required details, you can choose the netbanking option to make the payment online.

On successful payment, a challan counterfoil will be displayed containing the challan information number, payment details and bank name through which e-payment was made.

What if you don’t pay?

If you fail to pay the advance tax as stipulated, the due taxes attract interest. 

Deadline of filing DIR 3 KYC Extended to 15th Sept 2018

The Ministry of Corporate Affairs (MCA) has extended the due date for filing DIR -3 KYC without any filing fees to 15th September 2018. The Ministry is conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC. As part of this, every director who has been allotted DIN on or before 31-03-2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31-08-2018, using his/her own Class – II DSC and the form would be required to be digitally certified by a practicing professional (CS/CA/CMA) using Class-II DSC. Filing of Form would be mandatory for Disqualified Directors also. The due date has now been extended to 15-9-2018. After the due date of filing DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.

To File Now: Click Here

Key Highlights of 28th and 29th GST Council Meet

29th GST Council Meet

The Council recognised the concerns of MSMEs and SMEs and formed a committee to address specific concerns of this sector on compliance and rates. Here is a gist of outcome from the meeting;

All Provisional IDs to apply for GSTIN by 31st August 2018

Those with Provisional IDs must fill up GST REG-01 by 31st August 2018 and get GSTINs. Details of the taxpayer along with reason for not migrating in the system have to be provided. Once this process is complete, such taxpayers will be deemed to have been registered from 1st July 2017. Which means they must comply with all return filing as applicable.

Now cashback on GST portion

The next few months will be marked by a rise in household expenses, due to the festive season leading up to Diwali. This period is likely to see intense buying and selling activity and will lead to increase in GST collections. With this in mind - the GSTCouncil decided to launch a pilot on allowing cashback on 20% of GST (max Rs 100) on payments made via specified digital means. This will be piloted in states who choose to sign up. For now, this will be launched via BHIM and Rupay. While this has been implemented to help people join the formal economy and adopt digital means - it is not clear how this will impact return filing and reporting for the sellers.

No GST refund to foreigners

Via a response to an RTI query, the finance ministry has clarified that foreigners who come to India and make purchases will not get any GST refund. The relevant provisions in the Act have not yet been made applicable. This refund has been laid down under section 15 of the Act, but is not in force yet. Bringing in this provision is likely to boost tourism in India, without severely impacting collections for the government, so we hope this is implemented soon.  

28th GST Council Meet

Simplified GST Return for Quarterly filers:

Regular taxpayers with a turnover of up to Rs 5 crores can now file GST returns on a quarterly basis against the earlier limit of Rs. 1.5 crores, either in ‘SAHAJ’ or ‘SUGAM’ depending on supplies being ‘B2C’ or ‘B2B & B2C’ respectively. Regular taxpayers with turnover over Rs. 5 crores, have to file monthly returns under the new return filing system under a system of ‘UPLOAD->LOCK->PAY’.

Changes to Input Tax Credit Rules

·         Scope increased to include:

§  Activities or transactions specified in Schedule III

§  13-seater vehicles, vessels, aircraft, vehicles for transporting money and on maintenance or general insurance services for vehicles.

§  Goods or services provided to employees by employer by law

·         Reversal of ITC for Payment of Invoice beyond 180 days from Invoice date will no longer attract Interest.

·         Cross-utilisation of ITC is being rationalised. Awaiting updates.

·         Weavers & Textile Industry to benefit with council approving the Refund of ITC accumulated due to condition of Inverted duty structure prevalent for Fabric manufacturing.

GST Registration

·         Taxpayers may now opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/Union territory.

·         Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.

Composition Scheme limit increased

·         Upper limit raised to Rs 1.5 crores from earlier limit of Rs. 1.0 crore.

·         Dealers providing services too can avail the scheme. But, upper limit restricted to Higher of Rs 5 lakhs or 10% of Turnover in preceding financial year.

Reverse charge mechanism further deferred

·         Decision taken to defer Sec. 9(4) of CGST Act till 30th Sept 2019 with the Council referring to a Committee for studying the Pros and Cons of the provision.

·         Purchase from unregistered dealers to attract RCM only in case of certain specified supplies. Awaiting the list.

New additions to Schedule III- i.e Not a Supply; In turn No tax payable

·         Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;

·         Supply of warehoused goods to any person before clearance for home consumption; and

·         Supply of goods in case of high sea sales.

For those yet to complete Migration into GST:

·         Taxpayers who received provisional identification numbers but could not complete the migration can now do so till August 31.

·         Taxpayers who filed Part A of FORM GST REG-26, but not Part B of the said FORM can approach the jurisdictional Central Tax/State Tax nodal officers with the necessary details.

·         Also, the Council has decided to waive the late fee payable for delayed filing of return in these cases.

Tax Compliances made easy under GST

The compliance burden has been reduced for more than 93% taxpayers in the country, as the turnover limit for the quarterly returns has been hiked from 1.5 crores to 5 crores. Additionally, a Single Page Return form has been created for filing quarterly return filers. It’s to be seen how the proposal for a monthly tax payment plugs the gap of Reconciling ITC claims. Challenge can be where the supply takes place between the Quarterly return filer and Monthly return Filer.

Sanitary Napkins exempt from GST

In one clean swoop the government has made the lives of countless Indian women easy. Sanitary napkins now will be exempt from GST. This also means that the GST paid on the input raw material used cannot be available for credit due to exemption of the end product, that indirectly impacts the pricing of this product.

For any assistance with GST, call us on 9900397777 or write to us at info@preethamandco.com

Deadline for I-T return extended till August 31

Extension of Due Date for filing of Income Tax Returns; For full details, please Log on: https://t.co/wshz48Lsk1

— Ministry of Finance (@FinMinIndia) July 26, 2018

Layman's guide to file your Tax Return

The due date for filing of income tax return (ITR) for the financial year 2017-18 (assessment year 2018-19) is 31 July 2018. ITR filing process starts from choosing the correct form, which depends on the nature of income and the status of the taxpayers.

Who all are liable to file the Income Tax Return?

Don’t presume that if tax has already been paid (via TDS), you don’t need to file the return. Irrespective of tax liability, every person whose total income is more than the basic exemption limit of Rs.2.50 lakh (3.00 Lakh in case of Senior Citizen), is liable to file his ITR.

How to go about it?

Step 1| Organize documents

Besides basic documents like your Permanent Account Number (PAN) and Aadhaar number or enrolment ID, you need to have documents related to income, investments, assets, bank accounts and so on. You don’t have to attach supporting documents along with the income-tax return form, you will need them to fill it.

If you had any income other than salary, like capital gains, rental income, divided income and so on, keep those documents handy too. Also, if you have any foreign income or assets, you need to have documents of that to put in details.

Step 2| Create your ITR e-filing account

If you are a first-time filer, you need to create an account on the ITR e-filing website. To login, you need to enter user ID (your PAN), password, date of birth and captcha code.

Step 3| Select the ITR Form

Login and select “filing of income tax return” on the dashboard. After that, choose the assessment year (AY) for which you want to file the ITR. The current AY is 2018-19, where you file returns for financial year (FY) 2017-18. FY is the year in which you earn the income, while AY is the year in which you assess your income and file your return. Next, choose the applicable ITR form.

Step 4| Fill in the details

Ensure you fill in the correct details. Aadhaar Number or enrolment ID is mandatory to file the return electronically. This year ITR forms are seeking a lot of new information like break-up of salary and house property income to be furnished in ITR-1 form instead of a single amount of income/loss, as required to be furnished earlier.

Step 5| Upload, e-verify return

The last step is to re-check all your details and upload the form. There is a window of 120 days from the date of uploading the return till which you can e-verify your return or send a signed copy of ITR-V to the tax department’s Central Processing Center, Bengaluru. If you are sending ITR-V physically, make sure you send it through ordinary or speed post and not by any private courier service.

What is 26AS, Form 16, Form 16A? Why is it important?

Form 26AS

Form 26AS is essentially a type of tax passbook that has details of various taxes deducted from your income. It can be downloaded from the income-tax department’s website. A taxpayer should ensure that ITR data is in sync with that of Form 26AS. The most common mistake done by the people is filing their ITR only using the form 16. However, you must check the other supporting documents like 26AS, Form 16A, saving proof etc.

Form 16/Form 16A?

Form 16 is a document issued by the employer to the employee listing the amount of income tax deducted and deposited with the government. Form 16 is issued after the end of the financial year for which tax was deducted. It essentially has two parts: Part A has details of the employee and tax deducted. Part B has lists salary break-up and deductions claimed. While Form 16 is for salary income, Form 16A is for income other than salary.

What is e-Verification of IT Returns?

Filing your income tax return (ITR) is not enough, you need to verify it too. Otherwise your return will not get processed. You can do the verification either offline or online. If you fail to either e-verify your ITR or post it to Centralized Processing Centre (CPC) of the income tax department in Bengaluru, return will be treated as an invalid return.

What happens if you miss the July 31 deadline?
One can file the income tax return after the July 31 deadline. However, the delayed income tax return attracts a late fee. If return is filed beyond due date but before December 31, then fees payable will be Rs.5,000 whereas in other cases it will be Rs.10,000.

Need Expert Assistance? Contact us at: info@preethamandco.com/ 9900397777 or Fill in the Work Request Form Click Here.

Director? Get your KYC done before 31st August 2018!

As part of updating its registry, MCA would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC to be notified and deployed shortly. 

Applicability:

Accordingly, every Director who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC. Filing of DIR-3 KYC would be mandatory for Disqualified Directors also.

Timeline:

On or before 31st August,2018. 

Details Required:

While filing the form,the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password(OTP). The form should be filed by every Director using his own DSC and should be duly certified by a practicing professional (CA/CS/CMA). 

What if not complied?

After expiry of the due date by which the KYC form is to be filed,the MCA21 system will mark all approved DINs (allotted on or before 31st March 2018) against which DIR-3 KYC form has not been filed as ‘Deactivated’ with reason as ‘Non-filing of DIR-3 KYC’. After the due date filing of DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.

For further assistance in getting your KYC done and filing DIR-3 KYC contact us at +91 9900397777 or mail us at info@preethamandco.com. 

The Insolvency and Bankruptcy Code, 2016-An Overview

The Government has felt a need to have a consolidated law or code to govern and regulate the matters of recovery of money from debtors who have borrowed and failed to repay debts even after it becomes due more particularly when those debts are not secured. The existing insolvency laws and laws relating to recovery of loans enacted for the purpose of companies and banks namely the Sick Industrial Companies Act, The Recovery of Debt Due to Banks & Financial Institutions Act, the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Companies Act 2013/Companies Act 1956 etc are not providing speedy remedy to recover the loans and debts due from debtors and in a way it has failed to improve the recovery position and possibility from debtor by the creditor.

Purpose of the Code:

(a)  To consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals.

(b)  To fix time periods for execution of the law in a time bound manner.

(c)   To maximize the value of assets of interested persons.

(d)  To promote entrepreneurship

(e)  To increase availability of credit.

(f)   To balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues.

(g)  To establish an Insolvency and Bankruptcy Board of India as a regulatory body for insolvency and bankruptcy law.

Applicability

The Code shall apply for insolvency, liquidation, voluntary liquidation or bankruptcy of Companies, LLPs, Partnership Firms and Individuals.

Exception: The Code shall not apply to Financial Service Providers like Banks, Financial Institutions and Insurance companies.

What is considered as a Claim under the code?

As per Section 3(6) of the Code, Claim means a right to payment or right to remedy for breach of contract if such breach gives rise to a right to payment whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured.

Applicable forms to file an application with NCLT.

The form in which the application is to be preferred is provided in the Application to Adjudicating Authority Rules as follows: Financial Creditor – Form 1, Operational Creditor – Form 5, Corporate Debtor – Form 6

Resolution Process (For Corporates)

Application on default: Any financial or operational creditor(s) can apply for insolvency on default of debt or interest payment

Appointment of IP: IP to be appointed by the regulator and approved by the creditor committee. IP will take over the running of the Company. From date of appointment of IP, power of Board of directors to be suspended and vested in the IP. IP shall have immunity from criminal prosecution and any other liability for anything done in good faith.

Moratorium period: Adjudication authority will declare moratorium period during which no action can be taken against the company or the assets of the company. Key focus will be on running the Company on going concern basis. A Resolution plan would have to be prepared and approved by the Committee of creditors.

Credit committee: A credit committee of creditors will be constituted. Related party to be excluded from committee. Each creditor shall vote in accordance to voting share assigned if 75% of creditor approve the resolution plan same needs to be implemented.

Liquidation Process

Initiation: Failure to approve resolution plan within specified days will cause initiation of Liquidation. Debtor can also opt for voluntary liquidation by a special resolution in a General Meeting.

Liquidator: The IP may act as the liquidator, and exercise all powers of the BoD. The liquidator shall form an estate of the assets, and consolidate, verify, admit and determine value of creditors’ claims.

Order of priority for distribution of assets: • Insolvency related costs • Secured creditors and workmen dues upto 24 months • Other employee’s salaries/dues up to 12 months • Financial debts (unsecured creditors) • Government dues (up to 2 years) • Any remaining debts and dues • Equity

Source: Wiki, EY, ICAI. Compiled and Presented by: Preetham Shetty & Co

Blockchain Technology & Accounting Industry

Blockchain technology has the potential to upend entire industries. Especially the financial sector may undergo disruptive change. Although this technology caught the attention of many of the largest financial institutions, use cases still remain in the experimental phase.

Blockchain is one of the most welcomed technologies of this new era. Digital scientists are categorising it as a medium to high impact creating technology. Blockchain was first introduced as the core technology behind Bitcoin, the headline-grabbing decentralized digital currency ecosystem proposed in 2008. A blockchain is a continuously growing distributed database that protects against tampering and revision of data and has the potential to shapeshift the nature of today’s accounting. At its core, blockchain is an open, decentralized ledger that records transactions between two parties in a permanent approach without requiring third-party authentication. This creates an extremely efficient process and would reduce the cost of transactions.

A blockchain solution, when combined with appropriate data analytics, could help with the transactional level assertions involved in an audit, and the auditor’s skills would be better spent considering higher-level questions. The move to a financial system with a significant blockchain element offers many opportunities for the accountancy profession. Accountants are seen as experts in record keeping, application of complex rules, business logic and standards setting. They have the opportunity to guide and influence how blockchain is embedded and used in future, and to develop blockchain-led solutions and services. Blockchain could enhance the accounting profession by reducing the costs of maintaining and reconciling ledgers, and providing absolute certainty over the ownership and history of assets. Blockchain could help accountants gain clarity over the available resources and obligations of their organisations, and also free up resources to concentrate on planning and valuation, rather than record keeping.

The spread of internet complemented with the rising speed of browsing over the last few years has led to exponential advancement of the digital world. Blockchain is set to be the next step on this evolution. Extensive research is being conducted worldwide in order to explore the prospects in revolution of technologies related to accounts and audit. It has even reached to the level of building a premise that Blockchain technology can bring tremendous improvement in terms of efficiency and reduction in consumption of time for the performance of services related to its concerned areas.

Source: The Management Accountant Journal, Deloitte

Startup Registration Service

Proprietorship

A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. A sole proprietorship is a business that is owned, managed and controlled by one person. It is one of the most common forms of business in India, used by small businesses operating in the unorganized sectors.

Proprietorship's are very easy to start and have very minimal regulatory compliance requirement for getting started. However, after the startup phase, proprietorship's do not offer the promoter a host of other benefits such as limited liability, separate legal entity, independent existence, transferability, etc., which are desirable features for any business. Therefore, proprietorship's are suited for unorganized, small businesses that will have a limited existence.

Preetham Shetty & Co. can help start-up a Proprietorship in 7 to 14 days, subject to Government processing time. Since the proprietorship is itself not distinguishable from its owner hence there is no registration or approval is required to start a proprietorship business. Proprietorship's do not have a process of incorporation. Therefore, our Business Advisers will advise you on the way the identity of the Proprietorship business can be established through other Government registrations.

There is no mechanism provided by the Government of India for the registration or incorporation of a Proprietorship. Therefore, the existence of a proprietorship is established only by tax registrations and other business registrations that a Proprietorship is required to have as per the rules and regulations. At Preetham Shetty & Co., we can help you establish an identity for your Proprietorship by obtaining the relevant registrations.

Hindu Undivided Family (HUF) Registration

HUF – Joint Hindu Undivided Family Business is a distinct type of organization which is unique to India. Hindu Undivided Families are the form of organizations has separate legal entity for the purpose of tax assessment. As the name suggests, an HUF is a family of Hindus. However, even Buddhists, Jains and Sikhs are regarded as Hindus, and can, therefore, set up HUFs. The concept of an HUF has basically evolved from ancient Hindu law. The HUFs have been defined under the Hindu law as a family, which consists of male lineally descended from a common ancestor and included their wives and unmarried daughters.

The relation of HUFs arises from the status not from legal contracts. Creating HUFs are the best possible way for an assessee to save taxes.

The registration of Joint Hindu Undivided Family is recommended as it helps in protection against infringement.

Partnership Company Registration

A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited Liability Partnership.

There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed amongst the Partners and Preetham Shetty & Co. can help start a registered or un-registered Partnership firm in India.

One Person Company Registration

With the introduction of the Companies Act, 2013 the concept of OPC (one person company) was introduced to support entrepreneurs who on their own are capable of starting a business by allowing them to create a single person economic entity. Only one single member is required to incorporate an OPC, which is the biggest advantage of OPC over private limited companies & partnerships. Similar to a Company, an OPC is a separate legal entity from its members, offers limited liability protection to its shareholders, is easy to incorporate and continues in the foreseeable future.

This is a new concept introduced by the Companies’ Act 2013 and is available for a business with a capital up to Rs.50 Lacs and a turnover up to Rs.2 Crore. The one-person company has some benefits in the companies act in terms of non-applicability of some provisions of the new act.

Limited Liability Partnership (LLP) Registration

Limited Liability Partnership Act, 2008 brought with itself the concept of LLP. The benefits of LLP are that it is simple to maintain & it provides the privilege of limited liability to the owners. Thus, combines the benefits of both company & partnership into a single organization. One partner is not responsible or liable for another partner's misconduct or negligence. Therefore, all partners have a sought of limited liability for each individual's protection within the partnership, similar to that of the shareholders of a corporation.

The only difference between the company and the LLP is that, the partners have the right to manage the business directly. Also, the personal assets are free from the errors, omissions, incompetence, or negligence of the LLP's employees or other agents. Thus, LLP is one of the easiest forms of business to incorporate and manage.

Private Limited Company Registration

A private company can be incorporated by following the provisions and regulations stated under the Company's Act 2013. The minimum number of persons required for the incorporation is 3. Whereas the maximum limit of the number of persons is 50. There are many benefits that are achieved by a private limited company. It enjoys a greater stability, legal identity, it is flexible and a greater combination of capital. This is supported with the diversified and different abilities of capital accumulation. The private company can be easily identified by just looking at the name, number of members it incorporates, the managements, directors etc. The number of directors who are to incorporate must be mentioned in Articles of Association. However, the private companies who enjoy its distinguished legal entity and the private companies which are the subsidiary of the other public companies is differentiated in Company's Act.

Preetham Shetty and Co can write and structure your company's objective, purpose, constitution, vision and mission statement, which will appeal to all stakeholders Help in selecting a very catchy name of your company and do the registration, and complete all the government procedures and compliance Do INC-32 Filing and File for PAN & TAN.

Public Limited Company Registration

A limited company grants limited liability to its owners &management in which it’s belong. Being a public company allows a firm to sell shares to investors this is beneficial in raising capital. it has required more stringent regulatory requirements as compared to a Pvt. Ltd Company.

A Public Ltd Company has almost all the characteristics of a private limited company. A Public Limited Company, in addition to the steps followed by a Private Limited Company has to obtain a certificate of Commencement of Business before they can commence the business.

Indian Subsidiary

There is a lot of interest among foreign companies to start their operations in India and tap into one of the largest and fast growing market, and have access to some of the best human resources in the world. A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entity incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India. In addition, a minimum of one Indian Director who is a Indian Director and Indian Resident is required for incorporation of an Indian Company along with an address in India.

When an Entity which is incorporated outside India (i.e. Foreign Country), makes 100% Foreign Direct Investment (FDI) as per Indian FDI policy, the Indian company incorporated for this purpose is said to be wholly owned subsidiary of that foreign entity. Under the current foreign investment policy, a wholly owned subsidiary can be established either under the automatic route, if the conditions specified therein are complied with (specific high priority industries) or obtain an approval from the FIPB. This is the easy and best method for setup a foreign based Company in India, where entire hold on share capital of a Indian company is hold by Foreign Based Entity.

Liaison Office in India

Foreign companies planning to set up their business operations in India need to start a liaison office. The main purpose of starting a liaison office is to explore possible business opportunities in India by gathering relevant business information. This helps the companies to develop a business strategy to tap the existing business potential in India. A liaison office also acts as a marketing channel to provide business information about the parent company and their products to the prospective clientele in India.

Section 8 Company

Generally, companies are promoted with an object of making profit by carrying commercial transactions. But a company can be registered with charitable motive with the object not to make any profit also. These companies must be formed with an object to promote of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. Meaning of Non-profit making Company. The name of a Company registered under Section 8 of the Act, the name shall include the words foundation, Forum, Association, Federation, Chambers, Confederation, council, Electoral trust etc.

As per section 8 of Companies Act 2013,where it is proved to the satisfaction of the Central Government that a person or an association of persons want to register themselves under section 8 as a limited company for the furtherance of above mentioned objects, the Central Government may, by license issued in prescribed manner allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited” , and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section.

Confused on what to choose? visit our blog post:

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