SECTION 181 – DONATION BY LOSS-MAKING COMPANY

Section 181 of the Companies Act, 2013 talks about the power of the board of directors of the company to contribute in the bonafide charitable organization. This section restricts the power of board of directors by inserting a cap of 5% of net profit. However, the Act is silent about contribution to bonafide charitable organization in case the company is in loss. A comparative analysis of the provisions of the Companies Act, 2013 vis a vis Companies Act, 1956 including our approach/opinion is as below: PROVISION The Board of Directors of a company may contribute to bonafide charitable and other...