Indian Companies Bill 2013 - Highlights

Replies

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  Nayan Goenka

  Kaustubh Katdare

  1. 2% of the profits every company makes will have to be invested in Corporate Social Responsibility related activities. These are called 'CSR' activities. If the companies fail to comply with the CSR rules, they'll be asked to provide an explanation or will be penalized.
  
  
  
  4. Companies won't be enforced to take social welfare. It can be taken voluntarily.

  
  dont these two points clash? they say you will no longer be enforced to take on social welfare activities. On the other hand they lay a compulsory 2% donation to CSR. Can you explain this in detail. Seems fishy to me.
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  Kaustubh Katdare

  These are two different activities. Companies are 'required' to donate 2% of the profits. So companies can donate money and not get involved itself in CSR.
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  Saandeep Sreerambatla

  This is applicable to companies with net worth of some dollars rite? or any startup should do this? sorry if my question is too basic.
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  Jeffrey Arulraj

  Kaustubh Katdare

  1. 2% of the profits every company makes will have to be invested in Corporate Social Responsibility related activities. These are called 'CSR' activities. If the companies fail to comply with the CSR rules, they'll be asked to provide an explanation or will be penalized.
  
  4. Companies won't be enforced to take social welfare. It can be taken voluntarily.

  Aren't both a rules a little more contradictory to each other
  
  So if a firm thinks it is optional to do Social activities Then how will it spend 2% of it's income in the field of social responsibilities work
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  Kaustubh Katdare

  English-Scared

  This is applicable to companies with net worth of some dollars rite? or any startup should do this? sorry if my question is too basic.

  Yes, it is. It does not affect the small / medium business. But rather applies to companies with Rs. 1000 cr+ annual turnover. Check our old thread: CSR (Corporate Social Responsibility) Mandatory For Indian Companies
  
  

  Conqueror

  Aren't both a rules a little more contradictory to each other
  
  So if a firm thinks it is optional to do Social activities Then how will it spend 2% of it's income in the field of social responsibilities work

  
  Explained -
  

  Kaustubh Katdare

  These are two different activities. Companies are 'required' to donate 2% of the profits. So companies can donate money and not get involved itself in CSR.

  
  The company must 'donate' money to the social cause. But getting involved in social activities itself (adopting a village, conducting programs or events etc.) is optional.
  
  Consider it as your donation to the local Ganesh festival. You must donate money - but getting involved in all the activities is optional.
  
  I hope that makes it clearer.