Discussion
Which Companies Amendment Act exempts companies with a CSR liability of up to ₹50 lakh a year from setting up CSR Committees?
Answer: D
The Act is the Companies (Amendment) Act of 2020.
The 2020 amendment inserted sub-section (9) in Section 135 of the Companies Act. It says that where the amount a company must spend on CSR does not exceed fifty lakh rupees, the company need not set up a CSR Committee, and the Board of Directors performs its functions.
The 2015 and 2017 Acts did not contain this exemption, and the 2019 Act dealt with other CSR matters such as unspent amounts.
Before the 2020 amendment every company covered by Section 135 had to form a CSR committee of three or more directors. The amendment let small spenders, those whose CSR amount does not exceed fifty lakh rupees in a year, skip the committee and let the board carry out its work, though the CSR obligation itself remains.
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