Section 181: Company to contribute to bona fide and charitable funds, etc
This section allows companies to contribute to charitable and other funds with certain conditions.
The section, clause by clause
What the section says
In plain terms
The Board of Directors of a company may contribute to bona fide charitable and other funds: Provided that prior permission of the company in general meeting shall be required for such contribution in case any amount the aggregate of which, in any financial year, exceed five per cent. of its average net profits for the three immediately preceding financial years.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 1 of 2018, s. 59, for “paid-up share capital and free reserves” (w.e.f. 9-2-2018).
- 1. The proviso omitted by Act 7 of 2017, s. 154 (w.e.f. 31-3-2017).
- 2. The word “further” omitted by Act 7 of 2017, s. 154 (w.e.f. 31-3-2017).
- 3. The words “and the acceptance” omitted by s. 154, ibid. (w.e.f. 31-3-2017).
- 4. Subs. by s. 154, ibid. for sub-section (3) (w.e.f. 31-3-2017).
Referred to by
Search the whole Act, or ask it a question, in the interactive browser.
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.