CHARITABLE CONTRIBUTIONS
S. 293 (1) (e)
ü The Board of directors of
a public company, or of a private company which is a subsidiary of a public
company, shall not, except with the consent of such public company or
subsidiary in general meeting
ü contribute to charitable
and other funds
ü not directly relating to
the business of the company
ü or the welfare of its
employees,
ü any amounts the aggregate
of which will, in any financial year, exceed fifty thousand rupees, or five per
cent, of its average net profits during the three financial years immediately
preceding, whichever is greater.
293B. Power of Board and other persons to make contributions to
the National Defence Fund, etc
(1) The BOD of any co. or any person or
authority exercising the powers of the Board of directors of a company, or of
the company in general meeting, may, notwithstanding anything contained in
sections 293 and 293A or any other provision of this Act or in the memorandum,
articles or any other instrument relating to the company, contribute such
amount as it thinks fit to the National Defence Fund or any other Fund approved
by the Central Government for the purpose of national defence.
(2) Every co. shall disclose in its profits
and loss account the total amount or amounts contributed by it to the Fund
referred to in sub-section (1) during the financial year to which the amount
relates.
Important Distinctions
Private
Company
|
Public
Company
|
ü Minimum Paid up capital- Rs. 1 Lakh
ü Minimum Number of members- 2
ü Maximum number
of members- 50 excluding members in
employment
ü Minimum number
of Directors- 2
ü Transfer of
shares- Requires prior permission of ‘BOD’
ü Public
subscription- AoA prohibits any invitation to public to subscribe
ü Acceptance of
public deposit- AoA prohibits any invitation or acceptance of public deposits
ü Commencement of
business- Can commence business immediately after certificate of incorporation.
ü Issue of
prospectus- Need not prepare a prospectus or statement in lieu of prospectus.
ü Allotment of
shares- can allot shares without receiving minimum subscription.
ü Statutory
meeting- Not required to hold a statutory meeting.
ü Provisions
regarding Directors- Not required to obtain Central Govt’s approval
for appointment or reappointment of M.D or whole time Director.
ü Managerial
Remuneration- No restriction on payment of
remuneration to Directors or MD
ü Index
of members- Not required to maintain an
Index of members.
|
-
Rs 5
Lakh
-
7
-
No
limit
-
3
-
No
restriction
-
Can
invite public to subscribe
-
Can
invite or accept public deposits.
-
Can
commence business only after certificate of ‘commencement of business’.
-
Must
prepare to file with registrar prospectus or statement in lieu of prospectus.
-
Cannot
allot shares without receving minimum subscription.
-
Must
hold statutory meeting within the prescribed time.
-
Must
do so
-
Cannot pay more than 11% of annual net
profit as managerial remuneration.
-
Must
keep such index if members exceed fifty.
|
MOA
|
AOA
|
ü Charter of
Company, contains fundamental conditions of incorporation
ü Defines scope
of articles of Company
ü Alteration
requires special resolution and approval of CLB/ Court.
|
-
Internal
regulations of Company
-
Rules
for carrying out objects set out in the MOA. Thus, subsidiary to MOA.
-
Altered
by special resolution.
|
- CHARITABLE CONTRIBUTIONS
- Political Contributions :
- DIVIDEND
- BORROWING POWER OF COMPANY DEBENTURE AND CHARGE
- Allotment of shares
- LAW OF PROSPECTUS IN COMPANY LAW
- Relationship between MOA and AOA.
- DOCTRINE OF ULTRA VIRES
- CONVERSION OF PRIVATE Company TO PUBLIC Company
- KINDS OR TYPES OF COMPANIES
- COMPANY LAW:-Characteristics of Company
