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Companies (CSR Policy) Amendment Rules, 2022 News from the desk of Ministry of Corporate Affairs (MCA)

September 29, 2022

Ministry of Corporate Affairs (“MCA”) on the 20th day of September 2022 issued a notification for the purpose of amending the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“Rules”).

The key changes in the Rules are as under:-

  • A new provision has been added under rule 3 which states that a Company having any amount in its Unspent Corporate Social Responsibility (“CSR”) account shall:
    • constitute a CSR Committee as under:
      • In the case of a Private Company having only two directors on its board shall constitute its CSR committee with two such directors,
      • In the case of a foreign Company, the CSR committee shall comprise at least two persons of which one person shall be authorized by the Company in accordance with section 380 of the Companies Act, 2013 (“Act”) and another person shall be nominated by the foreign Company.
    • Comply with the provisions contained in section 135 of the Act.
  • Rule 4, which explains the implementation of CSR, has been modified further to provide better clarity on the implementation of CSR policy. Also, to explain the term ‘entity’ established under the act of Parliament or state legislature.
  • The percentage of administrative overheads in total expenditure has been reduced from ‘five percent’ to ‘two percent’ under Rule 8.
  • Under the Rules, the form for annual CSR reporting has also been modified substantially to make it more transparent and easy to understand.

The complete text of the Notification may be viewed at the below link:

https://bit.ly/3CinqtO

Last updated: 29/09/2022

Article contributed by:

Syed Arsalan Ahmed

Associate - Legal

MBG Corporate Services


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