Corporate Law

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Megha S (Querist)

24 January 2008 The company which has been in existence for less than three financial years not to be allowed to contribute any such amount to political parties.

ex: 'A' Ltd incorporated on 2nd feb 2003. on 1st nov.2005, can the company donate amount to political parties?

i think it can.because the company was in existence for more than three financial years
(financial year 2002-2003
financial year 2003-2004
financial year 2004-2005).

is it correct.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

25 January 2008 Section 2(17)(f)of the companies Act defines Financial year (in relation to any body corporate)as the period in respect of which any profit and loss account of the body corporate (laid before it in AGM) is made up, whether that period is a year or not.
Only if your company satisfies the three year financial year requirement as stated in section 293A(1)(b),with reference to the above said definition of financial year your assumption will be correct.

If your company satisfies that requirement then compliance of section 293A will be required.

R.V.RAO

R.V.RAO (Expert)

25 January 2008 YOUR PRESUMPTIONS ARE CORRECT AND HOPE YOU HAVE LAID P&L ACCOUNT AND B/S BEFORE AGM FOR THE 3 FIN. YEARS STATED BY YOU AND OTHER TERMS OF SEC 293A ARE COMPLIED .IF SO YOU HAVE COMPLIED WITH THE LAW.
R.V.RAO

Megha S

Megha S (Querist)

25 January 2008 Thanks

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