Who is Eligible for CSR Registration in India? A Complete Guide for NGOs, Trusts, Societies & Section 8 Companies

Introduction

Corporate social responsibility is not just a law in India; it is also one way companies can engage in social development. In setting forth CSR activities, NGOs, Trusts, Societies, and Section 8 Companies have to undergo the process of CSR Registration with MCA (Ministry of Corporate Affairs). But then comes the really big question: What is the validity of CSR registration in India; i.e., Who is qualified for a CSR registration in India? Let's put this into perspective.

Criteria for CSR Registration

In order to qualify for CSR funds, certain criteria have to be met by an entity, as laid down under Section 135 of the Companies Act, 2013, and CSR Rules 2021.

NGOs

• It must be registered as a Charitable Trust or Society or a Section 8 Company.
• It should have a minimum 3-year experience record in carrying out activities similar to those described in the Act.
• It should get itself registered for CSR-1 with MCA.

Trusts

• Public charitable trusts may qualify if they are duly registered under the Indian Trusts Act, 1882 or state trusts law.
• Should have a track record of social work of not less than 3 years.
• Private trusts will not be eligible.

Societies

• Should be registered under the Societies Registration Act, 1860, or state laws
• Should possess a proven track record of 3 years of social activism.
• Only CSR funds can be expended for various activities in Schedule VII of the Companies Act.

Section-8 Companies

• These are nonprofit companies registered under Companies Act, 2013.
• Need to have a track record of a minimum of 3 years in similar kinds of projects.
• Need to register CSR-1 form with MCA before boarding any CSR contribution.

Key Points to Remember

• The organization must be registered under 12A and 80G of the Income-Tax Act, else no tax benefits can be availed.
• The only ones entitled to receive CSR funds shall be those entities that have been approved under CSR-1.
• Foreign NGOs can cooperate with Indian entities that are registered under FCRA.

Conclusion

In India, NGOs, public charitable trusts, societies, and Section-8 companies can be registered for CSR, provided legal requirements are met and they have a minimum 3-year track record. With CSR registration, such entities shall be able to access corporate funds and hence create changes in education, health, environment, and other sectors of social development.