In the pursuit of Corporate Governance, Corporate Excellence, and better compliance with the provisions of the Companies Act, 2013 and rules made there under, the Ministry of Corporate Affairs has introduced continuous changes in the way the corporate functions, as well as changes in the role of stakeholders and professionals at large.
One of the most significant changes is the Introduction of E-Form CSR-1, which became mandatory for all Registered Societies, Registered Trusts, Registered Section 8 Companies, and other entities engaged in CSR (Corporate Social Responsibility) activities in India effective from April 1, 2021.
For example: The Tata Group, an Indian conglomerate, engages in a variety of CSR projects, the majority of which focus on community development and poverty alleviation. It has participated in women's empowerment, income generation, rural community development, and other social welfare programmes through self-help groups. The Tata Group supports numerous educational institutions with scholarships and endowments. The organisation also works on health-related projects such as child education, immunisation, and raising AIDS awareness. Economic empowerment through agriculture programmes, environmental protection, sports scholarship provision, and infrastructure development, such as hospitals, research centres, educational institutions, sports academies, and cultural centres, are among the other areas.
MCA eForm CSR-1
The Ministry of Corporate Affairs has made the CSR-1 eForm available on its website and has made filing mandatory for all social organisations seeking CSR funds or CSR implementing agencies.
The Companies (CSR Policy) Amendment Rules, 2021, rule 4, sub-rule 2:
- From April 1, 2021, every entity covered by sub-rule (1) must register with the Central Government by filing Form CSR-1 with the Registrar electronically.
- This CSR-1 must be electronically signed and submitted by the entity, and it should be digitally verified by a CA, CS, or CMA in practice.
- After submitting the form on the portal, a unique CSR registration number will be generated by the system.
What is the purpose of submitting Form CSR 1?
Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, allow companies to engage in CSR activities either directly or through entities defined under the Companies (Corporate Social Responsibility Policy) Rules, 2014.These companies/entities must file e-Form CSR 1 with the Registrar of Companies to register with the Central Government to engage in any type of CSR activity.
Organizations that are eligible to file the CSR-1 form:
- A company established under section 8 of the Act, or a registered public trust or society established under sections 12A and 80G of the Income Tax Act; or a company established under section 8 of the Act, or a registered trust or a registered society established by the Central Government or a State Government; or
- A company formed under Section 8 of the Act, or a registered public trust or a registered society formed under Sections 12AB and 80G of the Income Tax Act, 1961, with at least three years of experience in similar activities; or
- The NGO's authorised person and a practising professional must digitally sign Form CSR-1.
- The Professional could be a Chartered Accountant, Company Secretary, or Cost Accountant who works full-time, NGOs cannot file Form CSR-1 on their own; instead, they must contact the professional to file Form CSR-1.
Documents Required to file the CSR-1 form
- Copy of 12A and 80G Registration
- PAN Card of a non-profit organisation
- Phone number and email address for contact information
- Chairperson's PAN and Digital Signature Certificate
- Members who have volunteered to help the organisation
- Certificate of Incorporation for a Section 8 entity
- Deed of Trust for agency operating as Trust
- Certificate of Registration for Society
- NGO Darpan ID, if available
- DSC of the authorised person signing the form
- PAN of the authorised person signing the form
- CSR policy framed for the NGO working
- Any additional documents as required
Procedure to file CSR-1 to MCA
To file CSR-1 eForm with the MCA, the following process is required to be undertaken:
- The applicant is required to visit mca.gov.in and click on the ‘MCA Services’ tab.
- Go to ‘Company Forms Download’ option and download CSR-1 in your system.
- Fill the eForm CSR-1 with all the required details (Instruction Kit can be referred too)
- CSR-1 is also required to be digitally signed Company Secretary (CS), by a Chartered Accountant (CA), or a Cost Accountant (CA) in practice.
- Upload the CSR-1 eForm to the MCA Portal after ‘Prescrutiny Successful’ message.
- The eForm will be processed in STP mode. On successful submission of the eForm CSR-1, SRN will be generated and shown to the user which will be used for future correspondence with MCA.
- When CSR-1 eForm is successfully processed, an acknowledgement of the same is sent to the user in the form of an email to the email id of the entity.
- A digitally signed approval letter along with CSR Registration number with Format CSRXXXXXXXX where X represents system generated unique sequential number will be sent to the FO User as well as the email ID of the entity as entered in the eForm.
Features of CSR-1
The goal of introducing CSR-1 eForm by MCA is to increase transparency in Corporate Social Responsibilities activities by Society, Trusts, and Section 8 Companies, as well as to establish a corporate house which is needed for a reliable databank for such a noble and social cause.
Due Date – Form CSR-1
The MCA has not set a deadline for submitting Form CSR-1 to them. However from April 1, 2021, all CSR funding will be available only to those entities that have filed Form CSR 1 with the MCA.
Important Points to Remember When Filing Form CSR-1:
- The CSR-1 form is due to be filed with the ROC on April 1, 2021.
- A maximum of 5 CIN(s) of such entities can be enclosed in the e-form if the company is formed by a company or group of companies.
- The Form requires an email address, which is then verified using a One-Time Password (OTP).
- Only after a successful Pre-scrutiny of the Form can the applicant send a One Time Password.
- Applicants who fail to complete the task in the allotted time can download a new Form and file it the same day.
- Before beginning the registration process, double-check the validity of key management officials' DINs or PANs, such as Directors/CEOs/Authorized Representatives.
- There will be a maximum of 10 rows available for providing the details of the company's key management officials
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