Mandatory CSR Registration Number, 80G and 12A Registration for NGOs to undertake CSR activities

The concept of CSR (Corporate Social Responsibility) was introduced under the Companies Act, 2013 with the enforcement of Section 135 under the Act. Companies have certain responsibilities towards the stakeholders including the society in which it operates. Thus companies that cross the prescribed threshold are required to spend, in every financial year, at least 2%. of the average net profits of the company made during the three immediately preceding financial years.

 With a view to improving the CSR environment and the functioning of NGOs operating in India & rendering CSR support services to the companies, the MCA (Ministry of Corporate Affairs ) vide its Company Law notifications dated 22nd January 2021, had introduced substantial amendments to the CSR provisions under the Companies Act, 2013.

The key changes inter-alia includes the introduction of the concept of ongoing projects, mandatory impact assessment for bigger projects, CFO certification, enhanced disclosures, treatment of unspent CSR amount, revised criteria for implementing agencies, etc. Pursuant to the amendments, the companies are now subject to heavy penalties for non-compliance w.r.t treatment of unspent CSR amount.