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CSR (Corporate Social Responsibility) Registration Online in India
In India, CSR i.e. Corporate Social Responsibility is a crucial part of corporate governance. It is a mandatory initiative that requires business to contribute towards the social and environmental development of the nation.
The aim of CSR activities is to promote sustainable growth as well as to address numerous socio-economic challenges. The concept of CSR i.e. Corporate Social Responsibility had gained legal significance in India with the introduction of the companies act, 2013. CSR Registration is an essential process for those companies that want to take CSR initiatives in compliance with the particular act.
As per this law, it is compulsory for certain companies to allocate a portion of their profits toward CSR activities. Companies have to register their CSR projects with the government in order to make sure about transparency and accountability. Here, you will get everything about CSR i.e. Corporate Social Responsibility and CSR Registration.
What is CSR i.e. Corporate Social Responsibility?
Legal Framework for CSR (Corporate Social Responsibility) in India
The legal foundation foundation for the CSR i.e. Corporate Social Responsibility in India is provided by the following-
- CSR in India has been governed by section 135 of the Companies Act, 2013
- CSR Registration will be done as per CSR Policy of Companies Rules, 2014
- CSR (Corporate Social Responsibility) activities have been regulated and monitored by the MCA i.e. Ministry of Corporate Affairs with specific guidelines and reporting mechanisms
Benefits of CSR Registration
Legal Compliance
It makes sure about sticking to CSR regulations as per the Companies Act.
Enhanced Credibility
It will build trust among stakeholders as well as enhance brand reputation.
Better Resource Allocation
It helps in efficient planning and execution of CSR projects.
Recognition and Partnerships
It enables collaborations with NGOs and government agencies for impactful projects.
Better Risk Management
CSR Registration contributes to long-term sustainability as well as risk reduction.
Legal Compliance
Enhanced Credibility
Better Resource Allocation
Recognition and Partnerships
Better Risk Management
Key Provisions of CSR (Corporate Social Responsibility)
Applicability
CSR provisions have been applied to companies which meet any of the specific criteria as per the section 135 of the companies act, 2013. Companies have to meet the criteria in the preceding financial year which are as given below:
- Have a net worth of INR 500 crores or more
- Have an annual turnover of INR 1000 crores or more
- Have a net profit of INR 5 crores or more
If your company meets any of the above given conditions in a specific financial year, you must:
CSR Committee
Companies that meet the above criteria have to form a CSR Committee in order oversee CSR policy and implementation.
CSR Spending
Companies have to spend at least 2% of their net profit of the last three subsequent financial years on CSR activities.
CSR Reporting
Companies have to disclose all their CSR activities in their annual board reports as well as on their website.
Importance of CSR Registration
CSR Registration in India is essential due to:
Transparency
It makes sure about proper monitoring of CSR Funds.
Accountability
This registration is important to prevent the misuse of CSR contributions.
Legal Compliance
It will align CSR activities with the government regulations.
Recognition
It is important to help organizations in gaining credibility and public trust
CSR Registration Process in India
CSR i.e. Corporate Social Responsibility Registration in India includes a number of steps. It also involves obtaining CSR Registration number in order to implement agencies. Major steps are:
First of all, companies have to verify their eligibility criteria that has been prescribed under section 135 of the companies act 2013. If a company meets the specific criteria, it will initiate the CSR Registration process.
The companies which are eligible under CSR provisions need to form a CSR committee that consists of at least three directors including one independent director. The major responsibility of the CSR Committee are:
- Drafting a CSR policy
- Identifying focus areas
- Allocating budgets
- Monitoring CSR Projects
The specific companies have to choose CSR activities as per schedule VII of the Companies Act which includes:
- Eliminating poverty and hunger
- Promoting education and healthcare
- Sustainability of the Environment
- Rural development projects
- Support for armed force veterans
- Promotion of arts as well as sports
It is mandatory for the companies that want to receive CSR Funds and implement projects to register by filing Form CSR-1 with the MCA i.e. Ministry of Corporate Affairs. The organizations that need this registration are:
- NGOs including trusts, societies, as well as Section 8 Companies.
- Government-established entities
Procedure of Filing Form CSR-1
- Visit the official website of MCA (Ministry of Corporate Affairs) which is www.mca.gov.in and log in to the portal.
- Download Form CSR-1 to register for CSR activities.
- Fill in the required details including name & CIN of the company, details of the CSR committee, PAN of the implementing agency and declaration by authorized signatory.
- Attach all the essential documents required.
- Get the form digitally signed by a CA i.e. Chartered Accountant, or CS i.e. Company Secretary.
- Submit the form electronically by the MCA Portal.
- After the approval, you will get the unique CSR Registration number by the MCA (Ministry of Corporate Affairs)
Companies need to develop a well-defined CSR Policy that consists:
- Areas of CSR intervention including education, healthcare, environment, etc
- Budget allocation for CSR Activities
- Implementation and monitoring mechanisms
- Impact assessment framework
Companies can execute CSR activities with the help of registered NGOs, government initiatives, or self-driven projects. The process of involves:
- Identifying beneficiaries
- Allocating resources
- Conducting regular assessments
- Making sure about transparency in fund utilization
Compliance and Reporting Requirements of CSR
Annual CSR Reporting in Board Report
Companies need to include the details of CSR activities in their Annual Board Report that cover the following:
- The amount spent on CSR
- Details of handling projects
- Reasons for unspent CSR funds (if any)
Filing Form CSR-2
Companies have to file form CSR-2 annually that started from FY 2021-22 with MCA i.e. MInistry of Corporate Affairs. It includes:
- Details of CSR Expenditure
- Impact assessment reports (if applicable)
- Justification for unspent funds
Maintenance of CSR Funds and Transfer of Unspent Amounts
If your company is not able to spend the allocated CSR funds:
- For an Ongoing Project
Companies need to transfer the unspent amount to a separate CSR account and must utilize that amount within the next three years.
- For Other Cases
In any other case, companies need to transfer the amount to a government-specified CSR fund like PM CARES within six months.
Key Guidelines for CSR Activities
Companies have to use the CSR funds for the eligible activities as per Schedule VII of the Companies Act, 2013.
You need to align the CSR activities with national development goals as well as community welfare.
The expenses of the administration should not be more than 5% of the total CSR expenditure.
Companies need to transfer the unspent CSR funds to a dedicated CSR account or the CSR fund of the government.
Common Challenges in CSR Implementation
In order to overcome these challenges, companies need to:
Conduct impact assessments
Partner with registered NGOs
Establish transparent CSR policies and governance mechanisms
Penalties for Non-Compliance
- Hefty penalties of up to INR 1 Crore for companies, whereas INR 2 Lakhs for officers in default
- Severe legal consequences that include reputational damage
Recent Updates and Amendments in CSR
Mandatory Impact Assessment
Large companies that spend INR 10 Crore or more in CSR have to conduct impact assessments for major projects.
CSR as a Legal Obligation
CSR spending has now become a legal obligation. If you fail to do so, it will attract hefty penalties.
Use of Technology for Monitoring
Digital platforms have been introduced by the government in order to track the CSR spending and impact.
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Final Words
It is a crucial step in India for companies to contribute effectively to social development. You can do it with the help of CSR Registration. It plays a vital role in making sure about corporate accountability as well as sustainable development. Companies can contribute to society along with gaining regulatory and reputational benefits with the help of a structured registration and compliance process. Businesses can align their operations with social responsibility goals and contribute to the national progress by following the process of CSR registration carefully.
In order to comply with CSR laws, companies should understand their CSR obligations, form a CSR committee, register CSR activities with the MCA, make sure about timely reporting and fund utilization. Companies need to stick to legal guidelines, collaborate with credible partners as well as monitor the impact of their contributions for the successful CSR implementation. By following the above given guidelines, companies can enhance their social impact and also stay compliant with the evolving CSR regulations of India.
To understand it properly and for CSR registration you can seek the professional guidance of experts like Click To Professionals. So, what are you waiting for? Contact us now and stay compliant with the latest CST regulations in India.
