In the pandemic year, 1.38 lakh new companies were registered in India.
In the current financial year, 1,38,051 new companies were formed between April 2020 and February 2021, while 10,113 companies were struck off under section 248 of the Companies Act, 2013, between April 2020 and February 2021.
The financial statements are registered with the Ministry of Corporate Affairs for regulatory enforcement and to keep the register open to public scrutiny, and all records can be found at www.mca.gov.in. Financial ratios, such as sales to benefit, are not measured and the financial statements are filed. Due to filing delays or defaults, the number of filings can vary from year to year. Thus such financial ratios across the whole universe of filings are not comparable.
In 366 cases, a sanction for prosecution was imposed for violating CSR provisions.
When a violation of CSR provisions is confirmed, action is taken against non-compliant companies in accordance with the Act’s provisions, after a thorough review of records and due process. Compounding is possible for all CSR defaults. So far, 366 cases have been sanctioned for prosecution. A total of 148 applications for compounding have been submitted, with 75 cases compounded.
The following studies were carried out based on information given by the Indian Institute of Corporate Affairs (IICA):
- Coverage and emerging problems in the application of Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013; and
- A study of CSR spending in the country’s 100 tribal and backward districts.
CSR is a Board-driven mechanism, with the Board of Directors having the authority to schedule, determine, conduct, and control the company’s CSR activities based on the recommendations of its CSR Committee. The CSR architecture is focused on transparency, and CSR mandated companies must file reports of CSR expenditure in the MCA21 registry on an annual basis. Current legal requirements, such as mandatory disclosures, the CSR Committee’s and the Board’s accountability, and provisions for a formal audit of the company’s finances, among others, provide adequate protections.