Amended and updated notes on section 182 of Companies Act 2013. Detail discussion on provisions and rules related to prohibitions and restrictions regarding political contributions.
Chapter XII (Sections 173–195) of the Companies Act, 2013 (CA 2013) deals with the provisions related to meetings of board and its powers. Section 182 of CA 2013 provides for prohibitions and restrictions regarding political contributions.
Recently, we have discussed in detail section 181 (Company to contribute to bona fide and charitable funds, etc.) of CA 2013. Today, we learn the provisions of section 182 of Companies Act 2013.
The provisions of section 182 are effective from 12-Sept-2013. You may refer Notification No. S.O. 2754(E) issued dated 12-09-2013. In this article, you will learn detail of the provisions of section 182 of the Companies Act 2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XII |
| Chapter Name | Meetings of Board and its Powers |
| Section No. | 182 |
| Section Name | Prohibitions and restrictions regarding political contributions |
| Monthly Updated Edition | Company Law PDF |
Section 182 of Companies Act 2013: Prohibitions and restrictions regarding political contributions
Section 182 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013.
(1) Notwithstanding anything contained in any other provision of this Act, a company, other than a Government company and a company which has been in existence for less than three financial years, may contribute any amount directly or indirectly to any political party:
Provided that the amount referred to in sub-section (1) or, as the case may be, the aggregate of the amount which may be so contributed by the company in any financial year shall not exceed seven and a half per cent of its average net profits during the three immediately preceding financial years:
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 and such resolution shall, subject to the other provisions of this section, be deemed to be justification in law for the making and the acceptance of the contribution authorised by it.
(2) Without prejudice to the generality of the provisions of sub-section (1), —
- (a) a donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscription or payment was given or made, can reasonably be regarded as likely to affect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose;
- (b) the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall also be deemed, —
- (i) where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and
- (ii) where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose.
(3) Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed.
(4) If a company makes any contribution in contravention of the provisions of this section, the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.
Explanation: For the purposes of this section, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951.