27 June 2014
Hi all I have a query in relation to section 181 of the Companies Act 2013. Suppose a company had made a contribution to a charitable fund covered under section 181 of Co Act 2013, the amount of which was within the limit of 5% past three years average profit.Consequently, no prior approval was required in the general meeting. Now the company wishes to make additional contribution, the amount of contribution made earlier plus amount of contribution proposed to be made exceeds the limit of 5% past three years average profit. Does the company need to ratify the former contribution made and take approval for the proposed contribution in the General Meeting?
01 July 2014
Contribution below the 5% of the average net profit of the last three year, there is no need to get permission in GM. in case if the aggregate amount exceeds 5% of the average net profit of the last three years, it is necessary to obtain the permission of company in general meeting. For ex. the contribution made by your company in the F.Y 2012-13 is 4% or more but less than 5% in this case, there is no need to get permission in that financial year but the contribution to fund in the F.Y 2013-14 exceeds the limit i.e.5%, then in the F.Y 2013-14, you have to necessarily obtained the permission of Company in general meeting. This is what my view upon your query, wait for the response of other experts. Thanks.
01 July 2014
Thanks Bharat Ji for your opinion. I need to know the opinion in a case where in the same Financial Year company first makes a contribution which is within the ceiling limit and then wishes to make another contribution in the same Financial Year which exceeds the ceiling limit of 5%.
01 July 2014
when contribution exceeds the said limit at that time you have to obtained the permission in GM. here in your case at the second time when you made contribution it exceeds the said limit, then at that time only you need to get permission.
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