04 January 2011
Can a Public Ltd Company take approval from Shareholders for Maximum amount of donation say e.g. upto 100 Lakh in FY 2010-11 as donation to be made under the said Section?
As per the provisions of section 293(1)(e) of the Companies Act, 1956 a Public Company or a Private Company which is a subsidiary of a Public Company can make donations with the consent of the members to be obtained by way of an Ordinary Resolution to be passed in the General Meeting of the Company up to Rs.1,00,00,000 or 5 % of the average of the net profits of the Company computed in accordance with the provisions of section 349 and 350 of the Companies Act, 1956 which ever is greater.
The Charitable trusts, association etc. should not be related to the business of the Company or should not be for the welfare of the employees of the Company.
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