Section 182 of the Companies Act, 2013
Section 182 of the Companies Act, 2013 deals with provisions relating to political contributions by companies.
🔹 Section 182 – Prohibitions and Conditions for Political Contributions
1. Applicability:
Applicable to companies (other than government companies).
The company must have been in existence for at least 3 financial years to make political contributions.
🔹 2. Limit of Contribution:
A company may contribute any amount directly or indirectly to a political party.
Earlier, the limit was 7.5% of average net profits of the company during the last 3 financial years, but this limit has been removed by the Finance Act, 2017 (for companies under Companies Act, 2013).
🔹 3. Board Resolution Required:
The contribution must be authorized by a Board resolution passed at a duly convened meeting of the Board.
🔹 4. Mode of Contribution:
Contributions must be made by:
Account payee cheque or bank draft, or
Electronic clearing system, or
Through any instrument prescribed (e.g., Electoral Bonds).
🔹 5. Disclosure in Profit & Loss Account:
The company must disclose the total amount contributed and the name of the party to which such amount was contributed in its profit and loss account (Note: this requirement has been relaxed for contributions via electoral bonds, where names are not disclosed).
🔹 6. Penalty for Contravention:
If a company contravenes any provision of this section:
The company shall be punishable with a fine up to 5 times the amount of contribution.
Every officer in default shall be punishable with imprisonment up to 6 months and fine up to 5 times the amount contributed.
✅ Purpose:
To regulate the transparency and accountability of corporate donations to political parties and ensure that such contributions are properly disclosed and approved.
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