**5.1 Exemptions to start ups**

One of the compliance-related relaxations that have been provided by the legislature by way of this amendment is to clarify that for start-up companies that have come into existence for less than three years, while calculating the minimum statutory obligation to contribute funds for CSR activities, 2% of the net profit of the immediately preceding financial year would be considered, instead of 2% of the average net profit of the three immediately preceding financial years [21]. While on the face of it, such a clarification might seem rather obvious and practical, the absence of it has been giving rise to considerable confusion till date, especially amongst the start-up companies, which have already welcomed the clarification.
