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Section 182 of companies act

Muhammed (Chartered Accountant) (251 Points)

08 December 2015

CAN ANY ONE KINDLY EXPLAIN ME THIS CLAUSE PLEASE

SECTION 182 OF COMPANIES ACT

"a donation or subsrciption or payment caused to be given by a company on its behalf or on it’s a/c to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscripttion or payment was given or made, can reasonably be regarded as likely to effect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscripttion or payment to such person for a political purpose;"

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1 Replies

CA Prateek Garg (CA in Practice) (1447 Points)
Replied 11 December 2015

This provision extends the meaning of political dontion to include within its ambit any donation made to a political party indirectly.

Let me reproduce the provision in parts -

Any payment by a company shall be regarded as political donation if -

1. A donation or subsrciption or payment is made by a compny to a person

2. That person is carrying on any activity and it is reasonable to assume (at the time of making such donation) that such activity is likely to effect public support for a political party.

3. Compny know the fact (at the time of making donation) of such person carrying on such activity.