The Companies (Amendment) Act, 2019 came into effect on July 31, 2019. It replaced the Companies (Amendment) Second Ordinance, 2019. The new Act  significantly changed the corporate compliances and litigation in India.

The Companies (Amendment) Act, 2019 came into effect on July 31, 2019. It replaced the Companies (Amendment) Second Ordinance, 2019. The new Act  significantly changed the corporate compliances and litigation in India. The Act mandated that the companies with a profit of more than Rs 5 crore, turnover of Rs 100 crore and net worth of more than Rs 500 crore will have to spend at least two percent of their three years’ annual average net profit towards CSR activities. It also stated that companies will be obliged to transfer their unspent CSR funds to one of the funds prescribed under Schedule VII of the Act (such as the Prime Minister Relief Fund) within six months of the end of the financial year and disclose the reasons for non-spending in their annual report. As per the Act, If the unspent CSR funds are committed to certain ongoing projects, the company must transfer the amount to an unspent account with a scheduled bank within 30 days from the end of the financial year.