Companies Act Section 181 — Company to contribute to bona fide and charitable funds, etc

CHAPTER XII MEETINGS OF BOARD AND ITS POWERS

Commercial / Corporate

Summary

The Board of Directors of a company is allowed to give money to genuine charitable funds and other similar funds.

However, if the total amount given in any financial year goes beyond five percent of the company's average net profits from the three immediately preceding financial years, then the company must first get permission from its shareholders at a general meeting.

Official Text

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.