Sec182 of companies act 2013
This query is : Resolved
18 July 2014
Under the Companies Act 2013 contribution to any person for political purpose is not allowed. Can anyone put some more clarification on this point?
Ankur Garg
(Expert)
19 July 2014
Political contribution to any political party is allowed subject to the limit of 7.5% of net profit as prescribed in section 182(1). This contribution is also allowed by passing board resolution and needs to be disclosed in profit and loss account. This means law wants to protect the funds of the company from being misused.
Payment to a person is prohibited to avoid syphoning of funds of the company. It was noticed in past that some company paying company funds to its director indirectly as political contribution. So that may the reason.
Payment to a person is prohibited to avoid syphoning of funds of the company. It was noticed in past that some company paying company funds to its director indirectly as political contribution. So that may the reason.
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