CSR mandatory with New Companies Bill
Updated: Aug 09, 2013 03:38:36pm
New Delhi, Aug 8 (KNN) The New Companies Bill, 2012 passed by the Rajya Sabha now makes it mandatory for certain classes of companies to spend atleast 2 per cent of their average profits during the last three years on corporate social responsibility (CSR) activities.
“The Parliament has passed the New Companies Bill 2012… on its enactment will allow the country to have a modern legislation for growth and regulation of corporate sector in India,” said an official statement.
The Board of every company shall ensure the business spends in every financial year, at least two per cent of the average net profits made during the three immediately preceding financial years, in pursuance of its CSR policy, it said.
Further if the company fails to spend such amount, it has to specify the reasons for not spending the amount.
With the new legislation, India would possibly become the first country to have Corporate Social Responsibility (CSR) spending through a statutory provision.
Presenting the bill in Parliament, Corporate Affairs Minister Sachin Pilot termed the passage of the Bill as a new era for corporate law and regulation in Indian economy and said this was a “historic moment for the country.”
Meanwhile, the salient features of the New Companies Law are business friendly corporate regulation, e-governance initiatives, enhanced disclosure norms and accountability of management, protection for minority shareholders, investor protection etc.
Simplified procedure (through confirmation by the Central Government) has been laid down for compromise including merger or amalgamation of holding companies and wholly owned subsidiaries between two or more small companies.
This would result in faster decisions on approvals for mergers and amalgamations resulting in effective restructuring in companies and growth in the economy. For other companies, such matters would be approved by tribunal.
The bill will now go for presidential assent. The lower house of parliament Lok Sabha cleared the bill on December 18 last year. (KNN/GUNJ)
“The Parliament has passed the New Companies Bill 2012… on its enactment will allow the country to have a modern legislation for growth and regulation of corporate sector in India,” said an official statement.
The Board of every company shall ensure the business spends in every financial year, at least two per cent of the average net profits made during the three immediately preceding financial years, in pursuance of its CSR policy, it said.
Further if the company fails to spend such amount, it has to specify the reasons for not spending the amount.
With the new legislation, India would possibly become the first country to have Corporate Social Responsibility (CSR) spending through a statutory provision.
Presenting the bill in Parliament, Corporate Affairs Minister Sachin Pilot termed the passage of the Bill as a new era for corporate law and regulation in Indian economy and said this was a “historic moment for the country.”
Meanwhile, the salient features of the New Companies Law are business friendly corporate regulation, e-governance initiatives, enhanced disclosure norms and accountability of management, protection for minority shareholders, investor protection etc.
Simplified procedure (through confirmation by the Central Government) has been laid down for compromise including merger or amalgamation of holding companies and wholly owned subsidiaries between two or more small companies.
This would result in faster decisions on approvals for mergers and amalgamations resulting in effective restructuring in companies and growth in the economy. For other companies, such matters would be approved by tribunal.
The bill will now go for presidential assent. The lower house of parliament Lok Sabha cleared the bill on December 18 last year. (KNN/GUNJ)
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