Corporate Social Responsibility

Section 8 Company Limited by Guarantee: An Alternative to Traditional Section 8 for FEMA & FCRA Issues Faced by Foreign Owned and Controlled Entities

Summary: The blog discusses the progressive shift in the implementation of CSR activities by foreign-owned and controlled entities, and how a Section 8 company limited by guarantee can serve as an alternative to the challenges faced by traditional Section 8 companies under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the Foreign Contribution (Regulation) Act, 2010.Continue Reading Section 8 Company Limited by Guarantee: An Alternative to Traditional Section 8 for FEMA & FCRA Issues Faced by Foreign Owned and Controlled Entities

Allocation of CSR Funds: Need for more equitable distribution

Context

The Ministry of Corporate Affairs (“MCA”) introduced the concept of Corporate Social Responsibility (“CSR”) for the first time through the Voluntary Guidelines on CSR, 2009. These guidelines encouraged companies to formulate policies to undertake CSR, provide for its strategic planning and a roadmap for its CSR initiatives. As a mandatory legal requirement, CSR was first codified in Section 135 of the Companies Act, 2013 (“CA 2013”). As recognized in the 21st Report of the Standing Committee on Finance on the Companies Bill, 2009, this was the first time in India, and also probably in the world that CSR was being introduced as a mandatory requirement.Continue Reading Allocation of CSR Funds: Need for more equitable distribution

Examining the Case for CSR in Kind

Context 

Corporate Social Responsibility (“CSR”) has remained a buzzword for multinationals, policy makers, consumers and other stakeholders alike. While every country has a CSR regime, the Indian CSR regime is unique due to its distinctive departure from the voluntary nature, which is one of the core aspects of a CSR framework. India is the only country in the world which has made both, the spending and reporting of CSR obligations mandatory. The new CSR regime notified by the Ministry of Corporate Affairs (“MCA”) on January 22, 2021 brought about a fundamental shift from the erstwhile ‘comply or explain’ regime to a mandatory CSR regime. This includes specific obligations relating to CSR fund disbursement, ‘utilisation’ of disbursed funds, monitoring and evaluation.Continue Reading Perspective: Examining the Case for CSR in Kind