Making of political donation

Proviso to Section 179(3) specifically provides that for matters specified in clauses (d) to (f), BOD may delegate its powers to committee of directors, the managing director, the manager or any other principal officer of the company.

In view of above, what about the matters specified in clause k, provided in point 8 of Companies (Meetings of Board and its Powers) Rules, 2014 like making of political donation?

Can Company pass a general resolution to delegate someone for making such contribution within the limits prescribed in section 182 of the CA, 2013??

Moreover proviso to section 182(1) states that "Provided further that no such contribution shall be made by a company unless a resolution authorising the making of such contribution is passed at a meeting of the Board of Directors"

Does this means that prior approval will be required before making such political contribution???

Replies (4)

Yes, you are correct.  This power cannot be delegated in view of specific provision in Sec.179(3).

 

Thank you Sir,

But do we need prior approval of BOD for making such contribution??

Yes, prior BOD approval is required for the contribution.

So the Board can give specific resolution like, 5crore to Party-A, 5crore to Party-B and etc but subject to a overall limit of 7.5% of net profit? and also authorise someone for making such contribution??

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