KK Ltd. is a company registered in the year 2017. Its share holding pattern is dispersed with 15% promoter and promoter group shareholding, 10% Pension fund, 50% state government shareholding and 25% public shareholding.
CS Professional · Advanced Company Law and Practice · PYQS · December 2020
KK Ltd. is a company registered in the year 2017. Its share holding pattern is dispersed with 15% promoter and promoter group shareholding, 10% Pension fund, 50% state government shareholding and 25% public shareholding. The company made a donation in the year 2019 general elections. Discuss whether such donation could be regarded as legal donation or not and what will be the liability of the company in such regard? Explain the relevant provisions.
Answer & Explanation:
According to section 182(1) of the Companies Act, 2013, the following companies are barred from making political contributions: Government Company The company which has been in existence for less than 3 financial years KK Ltd. has been registered in the year 2017 and it has given donation in the 2019 general election. Therefore, it has violated the provisions of section 182(1) of the Companies Act, 2013 because the Company has not completed three years from its existence. Hence, this donation cannot be treated as legal donation.
Topics: Political Contributions
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