Corporate Social Responsibility (CSR) plays a crucial role in supporting social initiatives in India. Under Section 135 of the Companies Act, 2013, companies with a net worth of ?500 crores or more, an annual turnover of ?1,000 crores or more, or a net profit of ?5 crores or more must spend at least 2% of their average net profits on CSR activities.
To receive CSR funds, Non-Governmental Organizations (NGOs), trusts, and Section 8 companies must complete CSR-1 Registration by submitting Form CSR-1 to the Ministry of Corporate Affairs (MCA). This registration is a mandatory requirement for organizations seeking funding from corporates under CSR initiatives.
This article provides a step-by-step guide on CSR-1 Registration, its benefits, and the importance of LLP Registration in ensuring compliance.
What is CSR-1 Registration?
CSR-1 Registration is the first step for NGOs and other eligible entities to receive funds from companies under their CSR obligations. The registration is done through Form CSR-1, which must be submitted to the MCA. Once approved, the NGO receives a unique CSR Registration Number, which allows them to participate in CSR-funded projects.
Who Can Apply for CSR-1 Registration?
The following entities are eligible for CSR-1 Registration:
Entities registered under LLP Registration are not eligible for CSR funding unless they also qualify under one of the above categories.
Benefits of CSR-1 Registration
1. Eligibility to Receive CSR Funds: Only NGOs with CSR-1 Registration can receive CSR funding from companies.
2. Enhanced Credibility: Registration with the MCA improves transparency and builds trust with corporate donors.
3. Increased Funding Opportunities: Organizations with CSR-1 Registration can partner with multiple companies for CSR-funded projects.
4. Government Recognition: CSR-1 Registration ensures that the NGO is recognized by regulatory authorities.
Step-by-Step Process for CSR-1 Registration
Step 1: Check Eligibility: Ensure that your organization is either:
LLPs are not eligible unless they operate as Section 8 companies.
Step 2: Obtain Digital Signature Certificate (DSC): The form must be signed digitally using a Digital Signature Certificate (DSC) of an authorized signatory.
Step 3: Fill Out Form CSR-1
Step 4: Submit to MCA: Once completed, the form is submitted electronically on the MCA portal with the DSC. Upon successful verification, a unique CSR Registration Number is issued.
Importance of LLP Registration for NGOs
Though Limited Liability Partnerships (LLPs) are generally not eligible for CSR funding, an LLP can register as a Section 8 Company to qualify.
Benefits of LLP Registration for NGOs
For NGOs considering LLP Registration, it is advisable to convert into a Section 8 Company to access CSR funds.
Conclusion
CSR-1 Registration is essential for NGOs, Trusts, and Section 8 Companies to receive CSR funds from corporate entities. The registration process ensures transparency, credibility, and compliance with government regulations.
While LLP Registration provides benefits in terms of legal compliance and liability protection, LLPs themselves are not eligible for CSR funding. However, an LLP can convert into a Section 8 Company to qualify for CSR-1 Registration.
By securing CSR-1 Registration, NGOs can access valuable corporate funds to drive meaningful social change and contribute to India's development.