Companies would now be required to pay unused CSR Expenditures

• If the situation arises where companies have leftover money allocated for corporate social responsibility (CSR) activities, they will necessarily have to deposit such funds into a government fund created for proper utilization of resources for public welfare, the cabinet has approved amendments to the Companies Act on Wednesday.

• The cabinet has approved the Companies (Amendment) Bill 2019, which is intended to replace the earlier ordinance issued to reduce the workload of special courts and lower the penalties applicable for small companies. Besides the reduced penalties, the bill aims to achieve some other changes in the law, such as the incorporation of the provisions regarding CSR. The draft amendment requires that if a company does not use the CSR amount allotted to a particular year within three years, it has to transfer that amount to a dedicated fund established by the government.

• Making CSR activities of companies more accountable, said a government official who declined to be named. Indian companies spend close to INR15, 000 crore annually on CSR, as per the data available with the government. The law prescribes that companies with a minimum net worth of 500 crore INR or revenue of 1, 000 crore INR or net profit of 5 crore INR should

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same. 

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.