Urgent-regarding charitable activities

You will also have to comply to teh provisions of sectin 293(1)(e) of teh companies act 1956 whihc states as follows:

Section 293

RESTRICTIONS ON POWERS OF BOARD.

(1) The Board of directors of a public company, or of a private company which is a subsidiary of a

public company, shall not, except with the consent of such public company or subsidiary in

general meeting, -

(e) contribute, after the commencement of this Act, to charitable and other funds not directly

relating to the business of the company or the welfare of its employees, any amounts the

aggregate of which will, in any financial year, exceed fifty thousand rupees or five per cent of its

average net profits as determined in accordance with the provisions of sections 349 and 350

during the three financial years immediately preceding, whichever is greater.

Explanation 1 : Every resolution passed by the company in general meeting in relation to the

exercise of the power referred to in clause (d) or in clause (e) shall specify the total amount up to

which moneys may be borrowed by the Board of directors under clause (d) or as the case may

be, the total amount which may be contributed to charitable an other funds in any financial year

under clause (e).

. Explanation III : Where a portion of a financial year of the company falls before the

commencement of this Act, and a portion falls after such commencement, the latter portion shall

be deemed to be a financial year within the meaning, and for the purposes, of clause (e).

Recent Topics :