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Legal Analysis of Corporate Social Responsibility Legal Analysis of Corporate Social Responsibility

Bronze medal Reporter Adv.Lakshmi Posted 2 Dec 2018 Post Comment Visitors: 321 Read More News and Blogs
Legal Analysis of Corporate Social Responsibility

In the world’s history, India is the first country which made the Corporate Responsibility Mandatory. It is happened through the amendment of Companies Act, in the year 2013.  The amendment states that the companies with net profit, which is more than 50 million dollar in a year, should give its 2 percent of three years profit to CSR.  It made mandatory that companies should reveal their CSR to the shareholders of the company and it is defined by the CSR rules.  It starts with the assessments on certain things like Customers, Suppliers, Environment, Communities, and Employees etc. In the last years, the spending of the CSR amount rises as compared to the previous years. Education, Health Care, Social Welfare, Skill Care etc. are some functional area where the companies spend their CSR amount. lawyers in India can handle the legal issues related with it.

Let’s check how certain companies spending their CSR

Tata Group concentrates on the poverty alleviation programs and community improvement. They also spend the amount of CSR through the self-help group through different social welfare programs. They also part of the women health programs, educational programs etc.


Coca-Cola works very hard, in water preservation project, as the result of this they get the Golden Pea Cock award for their efforts. They implemented about 320 rainwater saving that is the rainwater harvesters in different states of India, that is about in 17 states. in Chennai they providing drinking water to about 30,000 children throughout the 100 schools.

 Corporate Social Responsibility.—

(1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.

 (2) The Board's report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee.

(3) The Corporate Social Responsibility Committee shall,—

(a) Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII;

(b) Recommend the amount of expenditure to be incurred on the activities referred to in clause (a), and (c) monitor the Corporate Social Responsibility Policy of the company from time to time.

(4) The Board of every company referred to in sub-section (1) shall,— (a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company's website, if any, in such manner as may be prescribed; and (b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.

(5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy: Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities: Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount. Explanation.—For the purposes of this section ―average net profit‖ shall be calculated in accordance with the provisions of section 198.  

Click on the image to read more about BCI RULES OF LEGAL EDUCATION FIRST AMENDMENT RULES 2016

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