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The Tax Publishers CSR--Mandatory Registration Securing CSR Funding: Navigating the Mandatory Registration Maze Pragya Lalwani The mandatory registration of trusts and societies to obtain Corporate Social Responsibility (CSR) funds has become a pivotal topic within the corporate and non-profit sectors in India. This article delves into the intricate legal frameworks governing CSR funding, highlighting the obligations imposed on non-profit entities and corporates alike. As a means to ensure transparency, accountability, and lawful disbursement of CSR funds, the Companies Act, 2013 has established a clear mandate for registration. This piece aims to provide a comprehensive understanding of the requirements, challenges, and implications of mandatory registration, fostering awareness among stakeholders to facilitate compliance. 1. Introduction Corporate Social Responsibility (CSR) has emerged as a significant aspect of corporate governance, emphasizing the responsibility of businesses towards social welfare, aligning their operations with sustainable and inclusive development goals. In India, CSR is governed by section 135 of the Companies Act, 2013, along with related applicable rules. As part of their CSR obligations, corporates are mandated to invest a portion of their profits in socially beneficial activities. To receive CSR funding from corporates, non-profit entities such as trusts, societies, and non-governmental organizations (NGOs) must comply with certain regulatory requirements. This initiative has transformed the landscape of corporate philanthropy, making it a statutory obligation for eligible companies. One of the critical mandates is the registration of these entities under the Companies Act, which involves submitting the CSR-1 form and obtaining a unique CSR Registration Number. Additionally, these entities must demonstrate an established track record in undertaking similar social initiatives. 2. Evolution of CSR Regulations in India India was one of the first countries to legally mandate CSR activities through the Companies Act, 2013. Initially, corporates enjoyed considerable flexibility in selecting implementing agencies for CSR projects. However, with instances of misuse of funds and lack of accountability, the government amended the CSR framework to introduce stricter compliance measures. The Companies (CSR Policy) Amendment Rules, 2021, marked a critical shift by mandating the registration of entities engaged in CSR activities. This legal evolution underscores the government's commitment to fostering responsible corporate philanthropy. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

CSR--Mandatory Registration

Securing CSR Funding: Navigating the Mandatory Registration Maze

Pragya Lalwani

The mandatory registration of trusts and societies to obtain Corporate Social Responsibility (CSR) funds has become a pivotal topic within the corporate and non-profit sectors in India. This article delves into the intricate legal frameworks governing CSR funding, highlighting the obligations imposed on non-profit entities and corporates alike. As a means to ensure transparency, accountability, and lawful disbursement of CSR funds, the Companies Act, 2013 has established a clear mandate for registration. This piece aims to provide a comprehensive understanding of the requirements, challenges, and implications of mandatory registration, fostering awareness among stakeholders to facilitate compliance.

1. Introduction

Corporate Social Responsibility (CSR) has emerged as a significant aspect of corporate governance, emphasizing the responsibility of businesses towards social welfare, aligning their operations with sustainable and inclusive development goals. In India, CSR is governed by section 135 of the Companies Act, 2013, along with related applicable rules. As part of their CSR obligations, corporates are mandated to invest a portion of their profits in socially beneficial activities. To receive CSR funding from corporates, non-profit entities such as trusts, societies, and non-governmental organizations (NGOs) must comply with certain regulatory requirements. This initiative has transformed the landscape of corporate philanthropy, making it a statutory obligation for eligible companies. One of the critical mandates is the registration of these entities under the Companies Act, which involves submitting the CSR-1 form and obtaining a unique CSR Registration Number. Additionally, these entities must demonstrate an established track record in undertaking similar social initiatives.

2. Evolution of CSR Regulations in India

India was one of the first countries to legally mandate CSR activities through the Companies Act, 2013. Initially, corporates enjoyed considerable flexibility in selecting implementing agencies for CSR projects. However, with instances of misuse of funds and lack of accountability, the government amended the CSR framework to introduce stricter compliance measures. The Companies (CSR Policy) Amendment Rules, 2021, marked a critical shift by mandating the registration of entities engaged in CSR activities. This legal evolution underscores the government's commitment to fostering responsible corporate philanthropy.