CSR Implementation Allowed Only via Certified Section 8 Companies

In a major regulatory shift to ensure greater accountability in the deployment of Corporate Social Responsibility (CSR) funds, the Ministry of Corporate Affairs (MCA) has announced that CSR implementation will now be permitted only through certified Section 8 companies. This directive is part of a wider effort to prevent misuse of CSR contributions and enhance transparency in social development projects undertaken by corporates.

Under the new mandate, only Section 8 companies with a valid CSR Registration Number—granted upon filing Form CSR-1—will be eligible to act as implementing agencies for CSR initiatives. This applies to all corporates covered under Section 135 of the Companies Act, 2013, and aims to create a qualified pool of non-profits that meet governance and compliance benchmarks.

The MCA emphasized that Section 8 firms must be fully compliant with filing obligations, financial audits, and must maintain a clean track record to retain their eligibility. Certified entities are also required to provide detailed utilization reports, impact assessments, and maintain project-wise financial records to validate the effective use of funds received.

Corporate entities partnering with unregistered or non-compliant NGOs for CSR implementation will be treated as violators under the revised framework, attracting penalties and disallowances in annual CSR disclosures. The integration of this rule with the MCA’s CSR portal allows for real-time verification of certified Section 8 partners.

Experts believe this move will significantly strengthen the CSR ecosystem by filtering out shell entities and promoting partnerships with credible, professionally managed non-profits. It also reflects the government’s resolve to channel corporate contributions into impactful, monitored, and legally compliant social initiatives—ensuring that CSR fulfills its purpose of driving sustainable and inclusive development across India.