CSR Applicability Under Section 135: Board and Finance Checklist
CSR is not just a donation budget. Section 135 creates a board-governance and reporting framework where applicability, committee, policy, spending and unspent amount tracking all matter.
For broader context, see the Companies Act, MCA and Startup Compliance Hub.
Section 135 base
Section 135 applies to companies meeting specified net worth, turnover or net profit thresholds and requires CSR governance. It also states that the Board shall ensure spending in every financial year of at least two per cent of the average net profits of the company made during the three immediately preceding financial years, subject to the provision.
For the connected rule, example or next step, see LLP Books and Audit Applicability: Section 34 Close Checklist.
CSR control table
| Control | Why it matters |
|---|---|
| Applicability test | Check net worth, turnover and net profit triggers. |
| CSR committee / board governance | Set up oversight where required. |
| CSR policy and project selection | Support eligible CSR activity and approval. |
| Spend tracker | Track 2% computation, actual spend and unspent amount. |
| Board report disclosure | CSR reporting must align with accounts and governance records. |
For the connected rule, example or next step, see Conversion of Private Company Into LLP: Board, Shareholder and Asset Checklist.
Finance checklist
- Compute average net profits carefully.
- Maintain project/vendor/implementing agency documents.
- Track ongoing vs other projects separately where relevant.
- Reconcile CSR spend with ledger and board-approved policy.
- Prepare board report annexure support early.
Finin2min warning
Official sources used
This article is intentionally source-limited to official MCA / India Code material. Verify final filing positions with the latest Act, Rules, MCA forms and portal advisories before publishing.
- India Code: Section 135 — Corporate Social Responsibility
- India Code: Companies (Corporate Social Responsibility Policy) Rules, 2014
- India Code: Companies Act, 2013 official PDF
For the connected rule, example or next step, see Founder KPI Dictionary: Stop Changing Metrics Every Board Meeting.
FAQs
Section 135 of the Companies Act covers corporate social responsibility.
Section 135 refers to at least 2% of average net profits of the three immediately preceding financial years, subject to the provision.
No. Finance, board/CSR committee and compliance teams should jointly control it.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Companies Act & MCA
- Official starting point
- www.mca.gov.in