Businesses are not just profit-driven entities; they are also expected to contribute to society. Corporate Social Responsibility (CSR) ensures that businesses operate ethically and engage in activities that benefit society and the environment.
With the introduction of CSR laws in India, companies must allocate a portion of their profits to CSR Activities, making it essential for NGOs and Section 8 companies to secure CSR Funds by completing CSR-1 Registration.
This article explores CSR Meaning, CSR Definition, CSR Applicability, the role of CSR Funds, and how NGOs can NITI Aayog Registration, 12A and 80G Registration, and FCRA Registration to maximize CSR benefits.
What is CSR? (Corporate Social Responsibility Meaning & Definition)
CSR Full Form:
Corporate Social Responsibility
CSR Meaning & Definition:
CSR refers to a company's obligation to contribute to social, environmental, and economic development beyond its core business operations. It includes activities that improve education, healthcare, environmental sustainability, rural development, and more.
CSR Applicability in India:
Under Section 135 of the Companies Act, 2013, companies must spend 2% of their net profits on CSR initiatives if they meet the following criteria:
•Net worth of ₹500 crores or more
•Annual turnover of ₹1000 crores or more
•Net profit of ₹5 crores or more
Importance of CSR for Businesses and Society
1. Enhances Brand Reputation
Businesses that engage in CSR Activities build trust with customers, investors, and stakeholders, leading to a stronger brand reputation.
2. Supports NGOs & Section 8 Companies
CSR Funds play a crucial role in financing Section 8 Companies, NGOs, and non-profits working on social welfare. CSR-1 Registration is mandatory for NGOs to access these funds.
3. Compliance with Government Regulations
CSR spending is legally required for eligible companies. Non-compliance can lead to penalties and reputational damage.
4. Attracts Investors & Employees
Ethical businesses attract socially conscious investors and employees who prefer working with responsible companies.
Types of CSR Activities in India
CSR Activities must align with Schedule VII of the Companies Act, 2013, which includes:
•Education and skill development (e.g., scholarships, digital literacy)
•Healthcare initiatives (e.g., hospital funding, medical camps)
•Environmental sustainability (e.g., afforestation, renewable energy)
•Poverty alleviation and hunger relief programs
•Gender equality and women empowerment projects
CSR-1 Registration: How NGOs Can Access CSR Funds
What is CSR-1 Registration?
CSR-1 Registration is a mandatory requirement for NGOs and Section 8 companies to receive CSR Funds from businesses.
CSR-1 Registration Process:
1. Obtain NITI Aayog Registration (via NGO Darpan Portal)
2. Complete 12A and 80G Registration for tax exemptions
3. File Form CSR-1 with the Ministry of Corporate Affairs (MCA)
4. Submit documents like PAN, registration certificates, and financial reports
5. Receive approval and unique CSR-1 Registration number
Section 8 Company & CSR: The Connection
What is a Section 8 Company?
A Section 8 company is a non-profit organization (NPO) registered under the Companies Act, 2013, focusing on charitable and social welfare activities.
Why Are Section 8 Companies Preferred for CSR Funds?
•Legal credibility: Section 8 Companies have a structured governance system.
•Eligibility for 12A and 80G Registration: Ensures tax benefits for donors.
•Compliance with CSR Applicability norms: Companies prefer donating to registered entities.
Section 8 Company Registration Process for CSR Benefits
1. File incorporation documents with the Ministry of Corporate Affairs (MCA)
2. Obtain NITI Aayog Registration for credibility
3. Complete 12A and 80G Registration to attract tax-exempt donations
4. Register for CSR-1 to receive CSR Funds
12A and 80G Registration: Maximizing CSR Benefits for NGOs
Why are 12A and 80G Registration Important for CSR?
•12A Registration: Grants income tax exemption to NGOs and Section 8 companies.
•80G Registration: Encourages corporate and individual donations by allowing tax deductions for donors.
12A and 80G Registration Process Online
1. Apply through the Income Tax Department portal
2. Submit PAN, financial statements, and governing documents
3. Pay applicable 12A and 80G Registration Fees (if using consultants)
4. Receive approval and certification
FCRA Registration & CSR: The Link to Foreign Donations
What is FCRA Registration?
FCRA Full Form: Foreign Contribution (Regulation) Act
FCRA Registration is mandatory for NGOs seeking foreign donations. Many international donors prefer organizations with CSR-1 Registration and 12A and 80G Registration.
FCRA Registration Process
1. Obtain NITI Aayog Registration
2. Apply through FCRA Online Services
3. Submit donor and financial records
4. Track FCRA Renewal Status regularly
Conclusion
Corporate Social Responsibility (CSR) plays a vital role in bridging the gap between corporate profits and social welfare. Companies engaging in CSR Activities benefit society while complying with CSR Applicability laws.
For NGOs and Section 8 companies, obtaining NITI Aayog Registration, 12A and 80G Registration, CSR-1 Registration, and FCRA Registration is crucial to accessing CSR Funds and government grants.
Frequently Asked Questions (FAQs)
1. What is CSR, and why is it important for businesses?
Ans. CSR (Corporate Social Responsibility) refers to a company’s responsibility to contribute to social, economic, and environmental development beyond profit-making. It is essential because it enhances brand reputation, ensures compliance with legal obligations, and supports social causes like education, healthcare, and sustainability.
2. What is the CSR Applicability rule under the Companies Act, 2013?
Ans. As per Section 135 of the Companies Act, 2013, CSR is applicable to companies that meet any of the following criteria:
•Net worth of ₹500 crores or more
•Annual turnover of ₹1000 crores or more
•Net profit of ₹5 crores or more
These companies must spend 2% of their average net profit on CSR Activities.
3. How can NGOs and Section 8 companies receive CSR funds?
Ans. NGOs and Section 8 companies must complete CSR-1 Registration with the Ministry of Corporate Affairs (MCA) to be eligible for CSR Funds. Additionally, having NITI Aayog Registration, 12A and 80G Registration, and FCRA Registration increases their chances of receiving funding from corporates and foreign donors.
4. What are some common CSR Activities undertaken by companies?
Ans. Common CSR Activities include:
•Educational programs and scholarships
•Healthcare initiatives (hospitals, medical camps, vaccinations)
•Environmental sustainability projects
•Poverty alleviation and hunger relief programs
•Women empowerment and skill development training
5. Is CSR Racing related to Corporate Social Responsibility?
Ans. No, CSR Racing and CSR Racing 2 are popular mobile games focused on drag racing and car customization. They are unrelated to Corporate Social Responsibility (CSR), which involves businesses contributing to social causes.
