CSR-1 Registration Explained: Benefits and Compliance

In India, Corporate Social Responsibility (CSR) has become a critical aspect of business operations, especially for companies aiming to give back to society. As per the Companies Act, 2013, certain companies are mandated to allocate a portion of their profits toward social welfare activities. To streamline this process and ensure transparency, the government introduced CSR-1 Registration, a mandatory requirement for organizations seeking to receive CSR funds.

In this article, we’ll explore what CSR-1 Registration is, its benefits, and how organizations can ensure compliance.

What is CSR-1 Registration?

CSR-1 Registration is the process by which Non-Governmental Organizations (NGOs), Non-Profit Organizations (NPOs), and other eligible entities register with the Ministry of Corporate Affairs (MCA) to receive CSR funding from corporates. This requirement came into effect on April 1, 2021, and aims to bring transparency and accountability in the disbursement of CSR funds.

Only organizations that have successfully completed CSR-1 Registration are eligible to receive funds for implementing CSR projects. The process involves submitting Form CSR-1, which verifies the organization’s legitimacy and ensures it meets the government’s standards for executing CSR activities.

Who Needs CSR-1 Registration?

1. Section 8 Companies: Non-profit entities registered under the Companies Act, 2013.

2. Registered Trusts and Societies: Entities registered under the Indian Trusts Act, 1882 or Societies Registration Act, 1860.

3. LLPs with Charitable Objectives: LLP Registration for entities working towards social causes.

4. Other Non-Profit Entities: Organizations recognized under various legal frameworks but actively engaged in CSR activities.

Key Requirements for CSR-1 Registration

To qualify for CSR-1 Registration, organizations must fulfill certain criteria:

1. Valid Registration: The entity must be legally registered as a Section 8 Company, LLP, trust, or society.

2. PAN Card: A Permanent Account Number (PAN) for the organization.

3. NITI Aayog Registration: While not mandatory, NITI Aayog Registration on the NGO Darpan Portal adds credibility and is often preferred by corporates.

4. 12A and 80G Certification: These certifications provide tax exemptions to donors and are often required by companies before disbursing CSR funds.

How to Apply for CSR-1 Registration

1. Visit the MCA Portal: Access the Ministry of Corporate Affairs website.

2. Download Form CSR-1: Fill out the form with details about the organization, including PAN, registration details, and key personnel.

3. Attach Required Documents: Submit the registration certificate, PAN card, and authorization letter from the governing body.

4. Digital Signature Certificate (DSC): The form must be signed digitally by an authorized signatory with a DSC.

5. Submit and Track: Once submitted, the application can be tracked online. Upon approval, the organization receives a unique CSR Registration Number.

Benefits of CSR-1 Registration

1. Access to CSR Funds: Only registered entities can receive CSR contributions from companies, opening up new funding opportunities.

2. Increased Credibility: Registration enhances the organization's trustworthiness in the eyes of corporates and donors.

3. Legal Compliance: Ensures the organization adheres to government regulations, reducing the risk of legal issues.

4. Networking Opportunities: Enables partnerships with corporations, government bodies, and other NGOs.

Compliance and Post-Registration Requirements

1. Regular Reporting: Organizations must report how CSR funds are utilized, ensuring transparency.

2. Audit and Documentation: Maintain proper records of all CSR activities and financial transactions.

3. Annual Updates: Update any changes in organizational structure, key personnel, or objectives with the MCA.

Conclusion

CSR-1 Registration is essential for NGOs and non-profit entities aiming to access CSR funds from corporates in India. It not only provides legal recognition but also enhances transparency and accountability in CSR activities. By ensuring compliance and using related registrations like LLP Registration, Startup India Registration, IEC Registration, and NITI Aayog Registration, organizations can maximize their impact and contribute meaningfully to society.