In pursuit of Corporate Governance, Corporate excellence and better compliance with Provisions of the Companies Act, 2013 and rules made there under from time to time, the Ministry of Corporate Affairs has introduced sweeping changes in the way the corporate functions, change in role of stakeholders and professionals at large. One of the major sea change is introduction of E-Form CSR -1 introduced and mandatory applicable with effect from 1st April, 2021 to all the Registered Societies, Registered Trusts and Registered Section 8 Companies and other entities engaged in CSR (Corporate Social Responsibility) activities in India. The purpose of introducing this form seems to bring transparency in activities of Corporate Social Responsibilities activities by Society, Trust and Section 8 Company and to create a reliable databank for such a noble and social cause by corporate houses.
The purpose of this article is to keep ourselves updated and understand changes in CSR provisions. Section 135 of the Companies Act, 2013 is reproduced for reference and better understanding.
What do you mean by Corporate Social Responsibility?
CSR or Corporate Social Responsibility is an intense term which explains the efforts of a company to improve society in any way possible. CSR improves the public image by publicizing the efforts for a better society and thereby increase their chances of becoming highly favoured in customers’ eyes.
CSR helps in enhancing the brand value of a company by building a solid relationship with customers. It helps companies to stand out among the competitors when companies are involved in a community.
Filing of form CSR-1
The Ministry of Corporate Affairs has made available CSR-1 form on its website and made it mandatory for all the social organisations seeking CSR funds or CSR implementing agencies to file it. As per rule 4, sub-rule 2 of the Companies (CSR Policy) Amendment Rules, 2021:
Every entity covered under sub-rule (1) is required to register itself with the Central Government by filing Form CSR-1 with the registrar electronically from April 1, 2021.
This form shall be signed and submitted electronically by the entity and should be digitally verified by a CA in practice or a CS in practice, or Cost Accountant in practice.
After the form is submitted on the portal, a unique CSR registration number will be generated by the system.
What is CSR-1 Form?
The CSR-1 form is aimed at efficient monitoring of CSR spending’s in the country. It is to be filed by implementing entities intending to undertake CSR activities electronically for all CSR projects effective from 1st April 2021.
At submitting the form, a unique CSR Registration Number shall be generated for all companies. In this way, a list of all such participating entities is maintained by the MCA which increases the chances of timely fulfilment of proposed activities. This past performance record of implementing agencies can be referred to by the companies and help them decide their engagement for future CSR activities.
As per Notification issued by Ministry of Corporate Affairs, from April 1, 2021 CSR Funding will be released only to that NGOs, that are registered with MCA by filing Form CSR-1.
Types of Organisations eligible to file the CSR-1 form
A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company, or
A company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government; or
Any entity established under an Act of Parliament or a State legislature; or
A company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities
Form CSR-1 is to be signed digitally by the authorised person of the NGO and a practising professional.
The Professional may be a Chartered Accountant/Company Secretary/Cost Accountant who is in whole-time practising, so NGOs cannot directly file Form CSR-1, they have to approach the professional for filing Form CSR-1.
Documents required for filing the CSR-1 Form
Copy of PAN Card of the NGO
Mail ID and Mobile Number
Details of Governing Body Members
Copy of Registration Certificate
Digital Signature of the Authorised Person with his PAN Number
Responsibility of the Board of Directors of a Company
The Board has to ensure that CSR activities are undertaken by the Company itself or through:
A company which is established under section 8 of the Act, or the registered public trust or such society, registered under section12 A and 80 G of the Income Tax Act, established by the company, singly or with any other company;
Company established under Section 8 of the Act or registered trust or a registered society established by state or central government;
Any entity established under the Act of the parliament or a state legislature; and
A company established under section 8 of the Act or the registered public trust or such society, registered under section12 A and 80 G of the Income Tax Act, having an established track record of at minimum 3 years undertaking similar activities.
How to download Form CSR-1 from the MCA website?
You can download this form from the MCA website in the following manner:
Scroll down page until you get to Incorporation services. Or else press Ctrl+F and write CSR and hit enter. You will reach the desired place
You can download the form with or without instruction. It will be downloaded in zip file format. Open it.
In a nutshell, Corporate Social Responsibility denotes a self-regulating business model that is based on a globally accepted concept named COREX. Further, section 135 of the Companies Act 2013, acts as the regulatory force for all the CSR related issues.
Also, recently, the MCA or Ministry of Corporate Affairs have amended some of the Companies (Corporate Social Responsibility Policy) Rules 2014, to infuse more transparency and increase the level of accountability of the companies towards the enhancement of environment and society. The amendment in the said rules is known as the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021.
Lastly, in case of any doubt or dilemma, reach out to Legal Window, our proficient and skilled Chartered Accountants and Company Secretaries are always there to serve you with the best advice and guidance.
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LegalWindow.in is a professional technology driven platform of multidisciplined experts like CA/CS/Lawyers spanning with an aim to provide concrete solution to individuals, start-ups and other business organisation by maximising their growth at an affordable cost.