Test Your Understanding of India CSR Law.

Test Your Understanding of India CSR Law.

Are you familiar with the Corporate Social Responsibility (CSR) laws in India? Test your knowledge with this multiple choice quiz and learn about the eligibility criteria, responsibilities, and penalties for non-compliance under the Companies Act, 2013.

1. What is the main legislation governing Corporate Social Responsibility (CSR) in India?

a) The Companies Act, 2013
b) The CSR Act, 2018
c) The Corporate Governance Act, 2002
d) The Business Responsibility and Sustainability Act, 2015

2. What percentage of net profits must a company set aside for CSR activities, according to the Companies Act, 2013?

a) 1%
b) 2%
c) 3%
d) 4%

3. Which of the following activities are considered CSR activities under the Companies Act, 2013?

a) Eradicating extreme poverty and hunger
b) Promoting gender equality and empowering women
c) Reducing child mortality and improving maternal health
d) All of the above

4. Contribution of any amount directly or indirectly to any political party under section 182 of the Act, shall not be considered as CSR activity. Is this statement true or false?

a) True
b) False

5. What is the penalty for non-compliance with CSR laws in India?

a) Fine
b) Imprisonment
c) Both fine and imprisonment
d) None of the above

6. Is it mandatory for a company to spend the entire CSR budget in a financial year?

a) Yes
b) No

7. Can a company carry out CSR activities through a third-party organization?

a) No, CSR activities must be carried out by the company itself
b) Yes, but only with prior approval from the government
c) Yes, a company can carry out CSR activities through a third-party organization
d) None of the above

8. Are foreign companies operating in India required to comply with CSR laws in India?

a) No, foreign companies are not required to comply with CSR laws in India
b) Yes, foreign companies are required to comply with CSR laws in India

9. Can a company carry out CSR activities through its own foundation or trust?

a) No, CSR activities must be carried out through government-approved organizations
b) Yes, a company can carry out CSR activities through its own foundation or trust

10. What is the role of the Board of Directors in CSR activities, according to the Companies Act, 2013?

a) The Board of Directors must approve all CSR activities and budgets
b) The Board of Directors must ensure that CSR activities align with the company’s business strategy
c) The Board of Directors is not involved in CSR activities
d) Both a and b

11. What are the functions of the CSR Committee?

a) Formulating and recommending the CSR policy to the Board
b) Recommending the amount of expenditure to be incurred on CSR activities
c) Monitoring the CSR policy of the company
d) All of the above

12. For companies not required to have a CSR Committee, who carries out the functions of the CSR Committee?

a) The Board of Directors
b) The Government
c) A third-party organization
d) The shareholders

13. What are the responsibilities of the Board of Directors in relation to CSR provisions?

a) Approving the CSR policy
b) Disclosing the contents of the CSR policy in the company’s report and on the website
c) Ensuring the company undertakes activities included in the CSR policy
d) All of the above

14. Are Section 8 companies required to comply with CSR provisions under the Companies Act, 2013?

a) No, Section 8 companies are not required to comply
b) Yes, Section 8 companies are required to comply

15. Is a holding or subsidiary company of a company that fulfills the CSR criteria required to comply with CSR provisions?

a) Yes, the holding or subsidiary company is also required to comply
b) No, the compliance with CSR requirements is specific to each company

16. If a company fails to spend at least 2% of its average net profit on CSR activities, what is the Board of Directors required to do?

a) Transfer the unspent CSR amount to the government
b) Specify the reasons for not spending the amount in the company’s report
c) Both a and b
d) None of the above

17. What is the role of the government in the approval and implementation of CSR programmes/projects of a company?

a) Approving and monitoring the implementation of the CSR programmes/projects
b) Providing funding for the CSR programmes/projects
c) Providing guidelines and rules for the CSR programmes/projects
d) All of the above

18. What is the minimum net worth a company must have to be eligible for CSR under the Companies Act, 2013?

a) Rupees 50 crore
b) Rupees 100 crore
c) Rupees 200 crore
d) Rupees 500 crore

19. What is the minimum turnover a company must have to be eligible for CSR under the Companies Act, 2013?

a) Rupees 100 crore
b) Rupees 250 crore
c) Rupees 500 crore
d) Rupees 1000 crore

20. What is the minimum net profit a company must have to be eligible for CSR under the Companies Act, 2013?

a) Rupees 1 crore
b) Rupees 2 crore
c) Rupees 3 crore
d) Rupees 5 crore

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Answers:

1. a) The Companies Act, 2013

2. b) 2%

3. d) All of the above

4. a) True

5. c) Both fine and imprisonment

6. b) No

7. c) Yes, a company can carry out CSR activities through a third-party organization

8. b) Yes, foreign companies are required to comply with CSR laws in India

9. b) Yes, a company can carry out CSR activities through its own foundation or trust

10. d) Both a

11. d) All of the above

12. a) The Board of Directors

13. d) All of the above

14. Yes, Section 8 companies are required to comply

15. b) No, the compliance with CSR requirements is specific to each company

16. c) Both a and b

17. c) Providing guidelines and rules for the CSR programmes/projects

18. d) Rupees 500 crore

19. d) Rupees 1000 crore

20: d) Rupees 5 crore

Note: These questions and answers are based on the Companies Act, 2013 and the Companies (CSR Policy) Rules, 2014. It is important to note that the laws and regulations surrounding CSR in India may be subject to change and it is always best to consult with legal counsel for the most up-to-date information.

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(CopyRight@India CSR)