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    Query wrt Section 8 company

    Posted By : Damini / Published on : 07-Nov-2020 10:28 AM / View : 1015 / Comment : 1

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    A section 8 company is Incorporated , object is they will fund education of School kids n ol.
    They want to take monthly donation from random public 500/- each monthly and with that it will fund the object. My question is:
    1. Can a section 8 company accept such donation?
    2. If yes, what are the compliance requirements?
    Read more on : company section query

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      1. Can a Section 8 company accept such donation?
      Yes, a Section 8 company can accept donations from the public for its charitable objects, including funding education for school children. Accepting monthly donations of a fixed amount, such as 500/-, is a common practice for nonprofit organizations.

      2. Compliance requirements for accepting donations:
      To comply with legal and regulatory requirements, here are some general compliance considerations for accepting donations as a Section 8 company:

      a. Income Tax Exemption: Ensure that the Section 8 company has obtained necessary approvals for tax exemptions, such as registration under Section 12A and approval under Section 80G of the Income Tax Act, if applicable in your jurisdiction. This allows donors to avail tax benefits for their contributions.

      b. Donation Receipts: Issue proper donation receipts to donors for their contributions. The receipts should include the company's name, registration number, PAN (Permanent Account Number), and details of the donation, including the date and amount. This helps donors in claiming tax benefits.

      c. Maintaining Donor Database: Maintain a comprehensive donor database, including donor information, donation amounts, dates, and modes of payment. This helps in tracking and managing donations effectively.

      d. Financial Reporting: Ensure proper accounting and financial reporting for all donations received. Maintain accurate records of income and expenses related to the donations.

      e. Utilization of Funds: Use the donated funds strictly for the charitable objects specified in the company's memorandum and articles of association. Maintain transparency in fund utilization and ensure that the funds are used for the intended purpose.

      f. Annual Compliance: Comply with annual filing requirements, such as filing financial statements, annual returns, and other relevant documents, with the Registrar of Companies or any other relevant authorities in your jurisdiction.

      10-06-2023 / 11:40:58 AM
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