A Note on the Recent Amendments under the Companies Act 2013
On 18th March 2020, the Ministry of Corporate Affairs invited public comments on the Draft Companies (Corporate Social Responsibility Policy) Amendment Rules 2020. The Draft rules projected the Government’s shift from a ‘comply or explain’ stand towards ‘comply or pay’. Based on the public feedback, the Government recently amended the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Section 135 of the Companies Act, 2013, effective 22nd January 2021 (Amendments).
Incorporating many recommendations put forth by the High-Level Committee on CSR 2018, the Amendments:
(a) implicitly highlight the Government’s deeper intent to push corporates to be more strategically involved with the CSR initiatives and on an ongoing basis
(b) explicitly lay out CSR functions and responsibilities of the corporates, and
(c) implement the Government’s intention to penalise corporates breaching CSR provisions through monetary penalties.
We have created a note that breaks down some of the key questions and implications of the recent amendments to the Companies Act 2013, some macro takeaways and what these amendments could mean for companies and non-profits.
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Disclaimer: This document is an interpretation of the recent amendments to the Act and its implications. It is not a legal document.
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