What is CSR?
Corporate Social Responsibility, commonly known as CSR, refers to a company’s responsibility toward the environment, society, and economic development. It's a self-regulating business model that enables companies to be socially accountable—to themselves, their stakeholders, and the public.
CSR Meaning in Indian Context
In India, CSR has evolved from being a voluntary practice to a legal obligation. The Companies Act 2013 introduced the concept into corporate law, making it mandatory for certain companies to spend a portion of their profits on CSR Activities. The law recognizes the need for businesses to give back to the community and support sustainable development.
CSR Applicability: Who Needs to Register?
CSR Applicability refers to the criteria that determine whether a company is required to undertake CSR initiatives and comply with related provisions.
Companies Covered Under CSR Applicability
As per Section 135 of the Companies Act, 2013, CSR is applicable to companies meeting any of the following criteria in the preceding financial year:
•Net worth of ₹500 crore or more
•Turnover of ₹1000 crore or more
•Net profit of ₹5 crore or more
If a company meets any one of these, it must form a CSR committee and spend at least 2% of its average net profits on eligible CSR Activities.
CSR Registration (CSR-1 Form)
What is CSR-1 Form?
The CSR-1 Form is a mandatory electronic form that needs to be filed by non-profit organizations (NGOs) who wish to receive CSR funds from companies. Introduced by the Ministry of Corporate Affairs (MCA) in 2021, the form brings transparency and streamlines the approval process for funding.
Who Must File CSR-1?
The following entities are eligible to file for CSR-1 Registration:
•Companies established under Section 8 of the Companies Act
•Registered public trusts
•Registered societies
These entities must also have a valid 12A and 80G registration under the Income Tax Act.
Timeline and Frequency for Filing CSR-1
CSR-1 is a one-time registration, meaning eligible entities need to file it only once unless there's a change in organizational structure or credentials.
Step-by-Step Process for CSR-1 Registration
Documents Required for CSR Registration
Before filing, NGOs need to prepare:
•Registration Certificate (Trust/Society/Section 8 Company)
•PAN Card of the NGO
•12A & 80G Certificate
•Digital Signature Certificate (DSC) of authorized signatory
•NGO Darpan ID (if available)
Digital Signature and Filing Process
The process involves:
•Downloading Form CSR-1 from the MCA portal.
•Filling the form with correct details.
•Attaching necessary documents.
•Verifying using DSC of the authorized person.
•Submitting it on the MCA21 portal.
Upon successful verification, a unique CSR Registration Number is generated.
Benefits of CSR-1 Registration
Access to CSR Fund
CSR-1 Registration opens doors for NGOs to receive financial support from corporates mandated to spend on CSR. Only registered entities are eligible to receive contributions from these companies.
Transparency and Credibility for NGOs
CSR-1 enhances an NGO’s credibility. Since registration is approved by the MCA, it becomes easier for companies to trust, and fund verified partners.
Common Challenges in CSR Registration
Incomplete Documentation Issues
Many NGOs face rejection due to missing or incorrectly formatted documents. Ensuring readiness beforehand is crucial.
Technical Glitches on MCA Portal
At times, server errors or portal maintenance can delay submissions. It's advisable to file well in advance of any funding deadline.
CSR Activities Allowed Under the Law
CSR funds must be spent on activities mentioned in Schedule VII of the Companies Act. These include:
•Promoting education
•Environmental sustainability
•Gender equality and women empowerment
•Eradicating hunger and poverty
•Health and sanitation
Examples of Permitted CSR Activities
•Building schools in rural areas
•Organizing health camps
•Funding renewable energy projects
•Supporting vocational training for women
Tracking and Reporting CSR Fund Utilization
Annual Reporting Requirements
Companies must disclose:
•CSR activities in their Board Report
•Amount spent and reasons for unspent funds
•Names of beneficiary organizations
This ensures accountability and public transparency.
Penalties and Non-Compliance Risks
Penalties for Not Filing CSR-1
Failure to register under CSR-1 makes an NGO ineligible for corporate funds. Companies that collaborate with unregistered NGOs may also face legal action.
As per MCA guidelines, non-compliance may result in:
•Monetary fines
•Scrutiny during audits
•Reputational damage
Future Outlook of CSR in India
The CSR framework in India is evolving rapidly. With digitization and stricter governance, CSR initiatives are expected to become more impactful and transparent.
Emerging trends include:
•Tech-driven CSR tracking
•Emphasis on climate resilience
•Inclusion of ESG (Environmental, Social, and Governance) principles
Conclusion
CSR-1 Registration is a cornerstone for transparency and legal compliance in India’s corporate philanthropy space. It bridges the gap between companies looking to fulfill their CSR obligations and NGOs striving to make a real impact. Staying compliant not only ensures funding eligibility but also builds trust and reputation in the ecosystem.
Frequently Asked Questions (FAQs)
1. What is CSR-1 Registration?
Ans. CSR-1 Registration is a process for NGOs to register with the Ministry of Corporate Affairs, enabling them to receive CSR funds from companies.
2. Is CSR-1 mandatory for NGOs?
Ans. Yes, CSR-1 is mandatory for all NGOs seeking CSR funding from companies after April 1, 2021.
3. How long does CSR-1 Registration take?
Ans. It typically takes 5-10 working days, provided all documents are in order.
4. Can a private trust apply for CSR-1 Registration?
Ans. Only public trusts registered under applicable laws are eligible for CSR-1.
5. Are foreign NGOs eligible for CSR-1?
Ans. No, only Indian registered entities are eligible.
6. Can CSR funds be used for administrative expenses?
Ans. Yes, but only up to 5% of total CSR expenditure in a financial year.
