Draft Board Resolution for Making Contribution to Political Party

In accordance with section 182 of the Companies Act, 2013, a company may contribute any amount directly or indirectly to any political party.

As per the said section, a Government company and a company which has been in existence for less than 3 financial years are not allowed to make political contributions.

The companies are required to disclose in their P&L accounts - the political contribution amount made during a financial year to which the account relates.

Such contribution can be made only if a resolution authorising the making of such contribution is passed at a meeting of the Board of Directors.

Templates of such board resolution is as follows —

Draft Resolution #1 (Multiple parties, amount fixed for each)

"RESOLVED THAT the company do make contributions or donations to the following political parties during the financial year 20XX-XX, in compliance with the provisions of section 182 and any other applicable provisions of the Companies Act, 2013, including any statutory modification(s) thereto or re-enactment(s) thereof for the time being in force, and subject to Article ..... of the Articles of Association of the company.

#   Name           Max. contribution amount

1.  ABC Party   Rs. One Crore only

2.  XYZ Party   Rs. Fifty Lakhs only

RESOLVED FURTHER THAT Ms. ......................., Managing Director and Mr. .........................., Company Secretary of the company be and are hereby severally authorized to do all such acts, deeds and things as may be necessary in this regard."

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Draft Resolution #2 (Multiple parties, amount not fixed for each)

"RESOLVED THAT in pursuance with the provisions of section 182 and any other applicable provisions of the Companies Act, 2013, as amended from time to time, and subject to Article .... of the Articles of Association of the company, the consent of the Board of Directors be and is hereby accorded to the company for making contributions or donations to the following political parties in equal ratio an amount not exceeding seven and a half per cent. of average net profits of the company during the three immediately preceding financial years:

#  Name

1. ABC Party

2. XYZ Party

3. OUI Party

RESOLVED FURTHER THAT the Company Secretary of the company be and is hereby authorized to do all such acts, deeds and things as may be necessary to give effect to the foregoing resolutions."

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Draft Resolution #3 (Single party, amount fixed)

"RESOLVED THAT in compliance with the provisions of section 182 and any other applicable provisions of the Companies Act, 2013, including any statutory modifications or re-enactments thereof for the time being in force, and subject to Article .... of the Articles of Association of the Company, the company do make contributions or donations of Rs. ......................./- to ................... Party, a political party of India.

RESOLVED FURTHER THAT the Managing Director and of the company be and is hereby authorized to do all such acts, deeds and things as may be necessary to give effect to this resolution."

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Draft Resolution #4 (Single party, amount not fixed)

"RESOLVED THAT in pursuance with the provisions of section 182 of the Companies Act, 2013, including any modifications thereto for the time being in force, and subject to Article ..... of the Articles of Association of the company, the consent of the Board of Directors be and is hereby accorded for making contributions or donations to ..................... Party, a political party of India, an amount not exceeding seven and a half per cent. of average net profits of the Company during the three immediately preceding financial years.

RESOLVED FURTHER THAT Mr. ................, Managing Director of the company be and is hereby authorized to do all such acts, deeds and things as may be necessary to give effect to this resolution."


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NOTE: The resolution sample(s) here is only for reference, to help you with drafting. Do refer the exact provisions of the Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.