Corporate Social Responsibility (CSR) Registration of an NGO
Khusbu Agrawal
Khusbu Agrawal (the “Valuer”) is a Fellow Member of the Institute of Company Secretaries of India (ÏCSI) having membership No. F11833. The Valuer is registered with the Insolvency and Bankruptcy Board of India (Registration No. IBBI/RV/03/2021/14393) to undertake the Valuation of Securities and Financial Assets of the Companies. She has more than 8 years of experience in Corporate law, merger & acquisitions. She has also done LLB, Master’s in Commerce and Master’s in journalism & Mass Communication. Further, Ms. Khusbu Agrawal has done post qualification course i.e. Certificate Course on Intellectual Property Rights conducted by ICSI. She is a qualified Independent Director and Social Auditor.
Corporate social responsibility (CSR) is an essential aspect of corporate governance that encourages companies to contribute positively to society. In India, Section 135 of the Companies Act, 2013 mandates certain companies to undertake CSR activities and spend a portion of their profits on social causes. Non-governmental organizations (NGOs) play a vital role in implementing these initiatives. However, an NGO must be registered under the appropriate regulatory framework to receive CSR funding. This article provides an overview of the CSR registration process for NGOs.
Understanding CSR Registration for NGOs
CSR registration is a legal process that qualifies an NGO to receive CSR funds from companies. The Indian government, through the Ministry of Corporate Affairs (MCA), has established guidelines to ensure that CSR funds are utilized effectively for genuine social welfare activities. According to Rule 4 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, NGOs must meet specific criteria before they can receive CSR contributions.
Eligibility Criteria for CSR Registration
To qualify for CSR funding, an NGO must satisfy the following requirements:
- Legal Entity Status: The NGO should be registered as a trust, a society, or a Section 8 company under the Companies Act, 2013.
- Operational Tenure: The organization should have a minimum of three years of operational experience before applying for CSR registration.
- PAN and Bank Account: The NGO must possess a valid Permanent Account Number (PAN) and an operational bank account.
- CSR-1 Form Submission: The NGO must file Form CSR-1 with the MCA to obtain CSR registration. This form serves as an official declaration of eligibility.
- Unique CSR Registration Number: Once Form CSR-1 is approved, the NGO receives a unique CSR registration number, which is required for receiving funds.
- Compliance with IT Laws: The NGO must adhere to the Income Tax Act, particularly Sections 12A and 80G, to ensure tax benefits for donors.
Step-by-Step Process for CSR Registration
NGOs seeking CSR funding must follow a structured registration process. The key steps include:
1.Prepare Required Documents
Before initiating the registration process, the NGO must gather the following documents:
- Registration certificate (Trust Deed, Society Registration Certificate, or Section 8 Incorporation Certificate)
- PAN card of the organization
- 12A and 80G registration certificates (if applicable)
- Bank account details of the NGO
- List of governing members and their details
2.Filing Form CSR-1
Form CSR-1 is the official application for CSR registration. It must be filed online with the MCA through the following steps:
- Log in to the MCA Portal: Access the Ministry of Corporate Affairs (MCA) website and log in using the organization’s credentials.
- Download the CSR-1 Form: Obtain the latest version of Form CSR-1 from the portal.
- Fill in the details: Enter relevant details, including the organization’s name, registration number, PAN, and operational details.
- Attach Required Documents: Upload supporting documents, such as the registration certificate and PAN card of the NGO.
- Digital Signature: The form must be digitally signed by an authorized signatory of the NGO and verified by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant.
- Submission and Acknowledgment: Once submitted, an acknowledgment receipt is generated, and the application is processed by the MCA.
3.Verification and Approval
The MCA reviews the submitted documents and verifies the details provided. If all conditions are met, the NGO is granted a unique CSR registration number, which is required to receive CSR funds from companies.
Benefits of CSR Registration for NGOs
CSR registration offers several advantages for NGOs:
- Access to Corporate Funding: Registered NGOs can approach companies for CSR funding and partnerships.
- Enhanced Credibility: Registration assures donors and stakeholders that the NGO is a legitimate and compliant entity.
- Legal Recognition: It establishes the NGO as an authorized recipient of CSR funds under the Companies Act, 2013.
- Tax Benefits: Compliance with Sections 12A and 80G of the Income Tax Act ensures tax exemptions and benefits for both NGOs and donors.
- Increased Social Impact: With CSR funds, NGOs can expand their operations and implement effective social programs.
Common Challenges in CSR Registration
While CSR registration offers multiple benefits, NGOs may face challenges such as:
- Complex Documentation: The process involves multiple legal formalities and documentation, which may be overwhelming for small NGOs.
- Regulatory Compliance: NGOs must comply with financial reporting and audit requirements to maintain CSR eligibility.
- Limited Awareness: Many NGOs are unaware of CSR provisions and the registration process, leading to missed funding opportunities.
Conclusion
CSR registration is a crucial step for NGOs seeking corporate funding to support their social initiatives. By fulfilling the eligibility criteria, completing Form CSR-1, and ensuring regulatory compliance, NGOs can leverage CSR funds effectively. As CSR regulations evolve, NGOs must stay updated with legal requirements to maximize their impact on society. Proper registration and compliance not only enhance the credibility of NGOs but also foster meaningful corporate-NGO collaborations for sustainable development.
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