FAQ on Company Law CSR :-
Query: I have a query regarding CSR on which I need some clarifications from your side. My query is -If total amount of charitable contribution proposed to be made to fund not connected with company or employees is upto 7% of average Net Profit of preceding 3 financial years which also includes 2% of CSR activity. Then whether we are required to take shareholder’s approval as well?
Answer: As per section 181 of Companies Act 2013, the board of a company may contribute to bonafide charitable and other funds upto 5% of its average net profits for the three immediately preceding financial years without obtaining prior approval of shareholders in general meeting.
Whereas, as per section 135 of companies act 2013, a company may contribute 2% of its average net profit for the three immediately preceding financial years, as a CSR activity.
Thus a company may contribute fund to charitable trust, etc. upto 7% including 2% as CSR activity without approval of shareholders.
CSGAURAV +919990694230
[email protected]
https://gauravsharmaassociates.wordpress.com https://femaindiaservices.wordpress.com https://www.facebook.com/gauravdelhiravpage
Subscribe to CS GAURAV SHARMA by Email
