SANGEETHA CHINNASAMY (CS Professional Student Cum Trainee) (69 Points)
08 August 2012Is there any maximum limitation for Public Ltd Company to give Donation to Charitble Trusts??
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 08 August 2012
Yes as per provision of Section 293(1) (e) of the companies Act the company has to make donation subject to the limits specified in the section. the provison of relevant clause (e) are given below:
(e) contribute, after the commencement of this Act, to charitable and other
funds not directly relating to the business of the company or the welfare
of its employees, any amounts the aggregate of which will, in any
financial year, exceed 1[fifty thousand rupees], or five per cent, of its
average net profits as determined in accordance with the provisions of
sections 349 and 350 during the three financial years immediately
preceding, whichever is greater.
2[Explanation I.—Every resolution passed by the company in general
meeting in relation to the exercise of the power referred to in clause (d) or in
clause (e) shall specify the total amount up to which moneys may be borrowed by
the Board of directors under clause (d) or as the case may be, the total amount
which may be contributed to charitable and other funds in any financial year
under clause (e).
3[Explanation III].—Where a portion of a financial year of the company falls
before the commencement of this Act, and a portion falls after such
commencement, the later portion shall be deemed to be a financial year within
the meaning, and for the purposes, of clause (e).
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