Corporate social responsibility is an innovative idea for foundations or organizations whose business has a totally positive impact on society and the environment and whose purpose is to profit only.
In India, CSR rules were introduced in 2013. These rules apply to companies whose net worth is Rs. 500 crore or more or whose turnover is Rs. 1000 crore or more. It is mandatory for those companies that have fulfilled these conditions, and they must spend 2% of their average net profits from the previous three financial years on CSR activities. This innovative idea encourages businesses to contribute more to NGOs for the benefit of society and the environment. There are several methods businesses can use to engage in CSR activities.
- Financial support for NGOs
- Environment Protection Initiatives
- Community development programs
Form CSR-1 Registration is a facility for NGOs such as Trust, Society, and Section 8 registered under the Companies Act, 2013 to get CSR funds from corporations that are eligible to give funds to the NGOs and cover CSR activities.
Purpose of the form CSR-1
The company can undertake CSR activities either itself or through entities that are defined under the Companies (Corporate Social Responsibility Policy) Rules, 2014, and the company has to register with the central government for undertaking any activities that are specified in the Rules and must file the CSR-1 form with the registrar.
This is the compulsory registration for undertaking any activities by NGOs, and this registration is required to be taken in CSR-1 form.
Eligibility criteria for NGOs
There are some conditions for an NGO to receive funds from a company, which are as follows:
- A section 8 company has to register under sections 12A and 80G of the income tax for the period of at least 3 years of undertaking charitable activities.
- A registered public trust registered under sections 12A and 80G of the income tax for the period of at least 3 years of undertaking charitable activities
- A registered society registered under sections 12A and 80G of the income tax for the period of at least 3 years of undertaking charitable activities
Registration of an NGO with the MCA portal for accessing CSR funds
There are the following procedures for the registration of an NGO with the MCA portal for accessing the CSR funds:
If NGOs intend to undertake any CSR activity, they need to register themselves with the central government by filling out the form CSR-1 electronically with the registrar.
After filling out this form, a unique CSR registration number will be generated by the system automatically.
Documents Required for CSR-1 Registration
The documents that are required to be uploaded for CSR-1 registration are as follows:
- Copy of the registration certification
- Copy of the PAN of the NGO
- DIN/PAN of the director, trustee, etc. of the organization
- DSC of the person
- A copy of the resolution authorizing the person by the entity with the resolution number
- Digital signature of an authorized person
- MOA and AOA
- Audited financial statements for the previous 3 years
- Annual Reports of the Previous Activities
Time Period of filling CSR-1 form
On March 29, 2024, MCA mandated filling out e-form CSR-1 by implementing entities intending to undertake CSR activities for all CSR projects, which they had to file on the MCA portal.
When all the documents has submitted and complete the registration process, MCA issues a registration certificate to the NGO, which is valid for a duration of 3 years. After the cessation of time, the NGO can renew its registration by submitting a fresh application to the MCA.
Advantages of CSR-1 Registration
There are some benefits to the CSR-1 Form, as per below:
One Stop Resource Hub: This is a centralized platform for NGOs that provides a wealth of information and resources.
Networking Opportunities: There are some networking opportunities with other NGOs working in the same fields.
Discounts on CSR-related products and services: This leads to cost savings, resulting in efficient project implementation.
Enchased public image and reputation: It gives transparency and compliance with CSR regulations.
Improved access to funding: NGOs can easily secure funding from corporations by registering the CSR-1 Form.
Conclusion:
CSR is a strategy that businesses can hold to contribute to society and the environment, build the trust of stakeholders and create shared value. In India, companies that meet certain financial criteria and before participating in CSR activities need to register with MCA by filling out the CSR-1 Form.
DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through Whatsapp:- +91-9871990888 or info@ngopilot.in .