Trusts – Be eligible to receive CSR

As per guidelines issued by MCA, From 1st April 2021, CSR Funding will be released only to that NGOs, Trusts, Religious Trusts, Societies, 12AA registered entities, 80 G granted entities, Section 8 Company that are registered with MCA by filing Form CSR-1.So, if such institutions willing to receive CSR Funding then it is mandatory for them to get registered with MCA by Filing Form CSR-1 as soon as possible. And Form CSR-1 is now live for Filing on MCA Portal. Neither there is any date prescribed nor is any fee prescribed to file the form CSR-1.

Conditions attached to eligible trust

Donation of money to a trust by a company is treated as CSR expenditure of the company wide General Circular No. 21/2014 of MCA dated June 18, 2014, which clarifies that Contribution to Corpus of a Trust/ Society/ Section 8 companies etc. will qualify as CSR expenditure as long as :

(a) the Trust/ Society/ Section 8 company etc. is created exclusively for undertaking CSR activities or

(b) where the corpus is created exclusively for a purpose directly relatable to a subject covered in Schedule VII of the Act

Now, another condition was issued by MCA by way of a following notification dated 22nd January 2021, making it mandatory for all NGO’s which wants to raise CSR Funding to enroll with MCA w.e.f 01/04/2021 to get CSR Funding.

MCA notifies 22nd day of January, 2021 as the date on which the provisions of section 21 of Companies (Amendment) Act, 2019 shall come into force. Section 21 deals with Amendment of section 135 of Companies Act, 2013 related to Corporate Social Responsibility. Also Read – Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021

Corporate Social Responsibility

“Corporate Social Responsibility (CSR)” means the activities undertaken by a Company in pursuance of its statutory obligation laid down in section 135 of the Act in accordance with the provisions contained in these rules, but shall not include the following, namely:-

(i) activities undertaken in pursuance of normal course of business of the company:

Provided that any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22, 2022-23 subject to the conditions that-

(a) such research and development activities shall be carried out in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act;

(b) details of such activity shall be disclosed separately in the Annual report on CSR included in the Board’s Report;

(ii) any activity undertaken by the company outside India except for training of Indian sports personnel representing any State or Union territory at national level or India at international level;

(iii) contribution of any amount directly or indirectly to any political party under section 182 of the Act;

(iv) activities benefiting employees of the company as defined in clause (k) of section 2 of the Code on Wages, 2019 (29 of 2019);

(v) activities supported by the companies on sponsorship basis for deriving marketing benefits for its products or services;

(vi) activities carried out for fulfillment of any other statutory obligations under any law in force in India;

As per this notification from 01 April 2021 onward, every entity, covered under sub-rule (1), who intends to undertake any CSR activity, shall register itself with the Central Government by filing the Form CSR-1 electronically with the Registrar. On successful submission of Form CSR-1, a unique CSR Registration Number shall be generated by system automatically.

Eligibility to file CSR-1.

(a) 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

(b) 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

(c) any entity established under an Act of Parliament or a State legislature; or

(d) 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

Filing CSR-1

Eligible entities cannot file Form CSR-1 directly with MCA. Form CSR-1 is to be signed digitally by the authorised person of NGO and a practicing professional. The Professional may be Chartered Accountant/ Company Secretary/ Cost Accountant who is in whole time practicing. The following documents are required for filing Form CSR-1

1. Copy of PAN Card of the NGO
2. Mail ID and Mobile Number
3. Details of Governing Body Members
4. Copy of Registration Certificate
5. Digital Signature of the Authorised Person with his PAN Number
6. If the trust is related to any corporate, then the details of the Corporate with CIN are required to be mention in the form.

CSR is applicable on Section 8 Company too

Section 135 prescribes “….shall ensure that company spends….”.The company has to spend the amount. Further, “ Every company…….”, i.e. no specific exemption given to section 8 companies with regard to applicability of section 135, hence section 8 companies are required to follow CSR provisions.

FORM NO. CSR-1

(Pursuant to section 135 of the Companies Act, 2013 and Rule 4(1) and (2) of Companies (CSR Policy) Rules, 2014)

Registration of Entities for undertaking CSR Activities

1. Nature of the Entity

o Company established under Section 8 of the Companies Act, 2013 with Section 12A and Section 80G registrations under the Income Tax Act, 1961.

o Registered Public Trust with Section 12A and Section 80G registrations under the Income Tax Act, 1961.

o Registered Society with Section 12A and Section 80G registrations under the Income Tax Act, 1961.

o Company established under Section 8 of the Companies Act, 2013 or Registered Trust or Registered Society established by the Central Government or State Government.

o Entity established under an Act of Parliament or State Legislature.

2 (a)Whether the Entity is established by any company or group of companies

o Yes No

(b)(i) If yes, then provide the details of such company (s)

CIN Of the Company Prefill

Name of the Company

(ii) If no, whether the entity has an established track record of three years in undertaking similar activities

o Yes No

3. (a) Type of Existing entity

CIN/ Registration Number

(In case of a Section 8 company, enter CIN. Else, enter registration number)

(b) Name of the entity

(c) Date of incorporation of the entity (DD/MM/YYYY)

(d) Address of the entity

Line I

Line II

City

State/ Union Territory

Pin Code

(e) E-Mail of the entity

(f) Enter OTP for Email ID

(g) PAN of the entity

4. Details of Directors/ Board of Trustees/ Chairman/ CEO/ Secretary/ Authorized Representatives of the entity: Nos

S.No.

Name

Designation

DIN/PAN

Email Id

List of Attachments

1. Copy of Certificate of Registration

2. Copy of PAN

Declaration

I am authorized by the Entity vide resolution number dated to sign this form and declare that the particulars given in the form herein above are true and also are in agreement with the documents maintained by the Entity.

To be digitally signed by

Designation

DIN of the director; or DIN or PAN of the Trustee or CEO or Chairperson or Chief functionary

-To be digitally signed by one director in case of Section 8 company

-To be digitally signed by one of the Trustee/ CEO in case of Registered Public

-To be digitally signed by Chairperson/ CEO/ Secretary in case of Registered Society

-To be digitally signed by Authorized Representative in case of Entity established under an Act of Parliament or State Legislature

Certificate by Practicing Professional

I declare that I have been duly engaged for the purpose of certification of this form. It is hereby certified that I have gone through the provisions of the Companies Act, 2013 and Rules thereunder for the subject matter of this form and matters incidental thereto and I have verified the above particulars (including attachment(s)) from the original/certified records maintained by the Company/ applicant which is subject matter of this form and found them to be true, correct and complete and no information material to this form has been suppressed. I further certify that:

1. The said records have been properly prepared, signed by the required officers/ authorized Representatives of the entity and were found to be in order;

2. All the required attachments have been completely and legibly attached to this form;

3. It is understood that I shall be liable for action under Section 448 of the Companies Act, 2013 for wrong certification, if any found at any stage.

To be digitally signed by

o  Chartered accountant (in whole-time practice)

o Cost accountant (in whole-time practice)

o Company secretary (in whole-time practice)

Whether Associate or Fellow Associate Fellow

Membership Number

Certificate of Practice Number

Applicability of Section in case of false statement

Note: Attention is drawn to provisions of Section 448 and 449 of the Act which provide for punishment for false statement / certificate and punishment for false evidence respectively.