Funding topic 7 of 12
CSR-funded assets and common facilities
Agree legal ownership, access and maintenance before placing an order.
Rule 7(4) ownership routes
The capital-asset rule recognises specified charitable entities with CSR registration, beneficiaries in the form of self-help groups, collectives or entities, and public authorities. A Farmer Producer Company Limited may potentially hold an asset as a genuine beneficiary entity under the beneficiary route. That possibility is not a blanket approval for every business asset, and beneficiary status does not itself require it to become a CSR implementing agency.
Document the full asset lifecycle
State the purchaser, invoice addressee, legal owner, installation site, title/lease rights, insurance, serial number, commissioning, approved users, pricing policy, maintenance responsibility and restrictions on sale, pledge, relocation and disposal proceeds. If the asset stands on a director’s property, obtain durable access and enforceable use rights rather than relying on an oral promise.
Usage charges and financing
User charges may be part of a sustainable project, but document permitted use of receipts, maintenance reserve and treatment of any surplus with the donor. Review GST and income tax separately. Do not assume permission to mortgage, sell or distribute the asset. A bank security proposal must be consistent with the grant, title and applicable law.
Practical questions
Can a CSR-funded machine be owned by the company?
Potentially under Rule 7(4)’s beneficiary-entity route, when the company genuinely represents project beneficiaries. Agree ownership, common access, location, maintenance and disposal conditions before purchase. It is not an unrestricted gift to the directors.
Read the topic and sourcesCan we charge farmers to use the machine?
A documented user-charge model may support maintenance, subject to project terms and lawful treatment of receipts or surplus. Obtain donor agreement, fair access terms and a tax review. Do not assume the receipts may be freely distributed.
Read the topic and sourcesCan a CSR-funded asset be mortgaged, moved or sold?
Check title, Rule 7(4), grant restrictions and project purpose. Obtain the required written approvals before committing. A lender’s willingness to accept security does not remove donor restrictions or establish the company’s right to pledge it.
Read the topic and sourcesWhat if the machine is installed on a director’s land?
Document the interest and approval requirements and secure enforceable tenure, access and asset-removal rights. Define insurance and maintenance. Avoid a project whose effective private benefit or fragile access undermines the intended farmer use.
Read the topic and sources