Ministry Of Corporate Affairs Brings Amended CSR Rules Into Effect

• 28 Jan 2021

The Ministry of Corporate Affairs has released a new order notifying the amendments in the CSR rules for companies.

• The provisions of the 2019 Amendment to the Companies Act, 2013 pertaining to Corporate Social Responsibility (CSR) came into force on January 22.
• These rules may be called the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

New Provisions

• Every entity that intends to undertake any CSR activity will have to register itself with the Central Government by filing the form CSR-1 electronically with the Registrar of Companies, with effect from April 1, 2021.
• Form CSR-1 shall be signed and submitted electronically by the entity and shall be verified digitally.
• On the submission of the Form CSR-1 on the portal, a unique CSR Registration Number shall be generated by the system automatically.

Besides this, companies undertaking CSR activities will have to share:

• Impact Assessment for big CSR projects.
• Carry forward and set off of CSR expenditure Annual action plan for CSR by Board every year in addition to CSR policy.
• Tweaks in reporting formats of Board Report.
• Mandatory disclosure of CSR projects and activities on company website.
• Capital Asset acquisition and its holding restricted to three bodies broadly.
• In the event of the company failing to spend the earmarked two percent of net profits towards CSR, it will "have to specify the reasons for not spending the amount" and, unless the unspent amount relates to any ongoing project, transfer it to a government notified fund.