🏢🌍 Unraveling Corporate Social Responsibility (CSR) under Indian Company Law: A 80/20 Rule Exploration 🌍🏢 Greetings #LinkedInCommunity! Today we are exploring the concept of #CorporateSocialResponsibility (#CSR) as stipulated under Indian #CompanyLaw. Here are the essential 20% of points that encapsulate approximately 80% of this significant subject.
1️⃣ CSR Concept and its Importance 🌍🤝:
CSR refers to a company’s commitment to contribute to sustainable economic development by improving the quality of life of the local community and society. It reflects a company’s consciousness towards societal and environmental health.
2️⃣ The Companies Act, 2013 – Section 135 📚🔍:
This section mandates every company with a net worth of INR 500 crores or more, or a turnover of INR 1000 crores or more, or a net profit of INR 5 crores or more during the immediately preceding financial year, to spend at least 2% of their average net profits on CSR activities.
3️⃣ CSR Committee and CSR Policy 📋🎯:
These qualifying companies must set up a CSR Committee consisting of 3 or more directors. This committee formulates and recommends a CSR Policy which outlines the CSR activities to be undertaken as per Schedule VII of the Act.
4️⃣ Schedule VII Activities 🏥🏫:
Schedule VII lists permissible CSR activities which include poverty eradication, promotion of education, gender equality, environmental sustainability, protection of national heritage, rural development projects, etc.
5️⃣ Reporting and Transparency 📄🔎:
The Board’s report submitted annually should include the composition of the CSR committee, CSR Policy, and a detailed report on the CSR initiatives undertaken during the year.
By understanding these crucial elements, you will gain a robust understanding of CSR under Indian Company Law. Let’s continue contributing to societal development, and feel free to share your thoughts!
