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Board & Shareholder Resolution for Donation to Charitable Trust

board resolution format for donation to charitable trustIn accordance with section 181 of the Companies Act, 2013, the Board of Directors of a company may contribute to bona fide charitable and other funds.

However, prior permission of the members of the company in general meeting is required for such contribution in case any amount the aggregate of which, in any financial year, exceed 5% of its average net profits for the 3 immediately preceding financial years.

Templates of board and general meeting resolutions are as follows:—

SAMPLE #1 Board Resolution

#. To contribute to bona fide charitable funds

“RESOLVED THAT the company do make contributions or donations to the following Charitable Funds, Trusts, etc, in compliance with the provisions of section 181 of the Companies Act, 2013, including any statutory modifications thereto or re-enactments thereof for the time being in force, and subject to Article .... of the Articles of Association of the company:

  #  Name of the Organisation     Contribution Amount
  1. ............... Foundation            Rs. ................. (Rupees .................. only)
  2. ........ Charitable Trust           Rs. ................. (Rupees .................. only)

RESOLVED FURTHER THAT Mr. ..........................., 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 to give effect to this resolution.”

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SAMPLE #2 Board Resolution

#. To contribute to bona fide charitable funds

“RESOLVED THAT in pursuance with the provisions of section 181 of the Companies Act, 2013, as amended from time to time, read with Article .... of the Articles of Association of the company, the consent of the Board of Directors be and is hereby given to the company for making contributions or donations to the following Charitable Funds, Trusts, etc, in equal ratio an amount not exceeding five per cent. of average net profits of the company during the three immediately preceding financial years:

 S.No.  Name of the Organisation
   1.      ABC Family Planning Foundation 
   2.      XYZ Peoples Welfare Charitable Trust
   3.      MNL Charitable Fund

RESOLVED FURTHER THAT the 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 the foregoing resolution.”

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SAMPLE #3 General Meeting Resolution

#. To contribute to bona fide charitable funds


To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY RESOLUTION.

“RESOLVED THAT in pursuance with the provisions of section 181 and any other applicable provisions of the Companies Act 2013, including any modifications or re-enactments thereof for the time being in force, and subject to Article .... of the Articles of Association of the company, the consent of the members of the company be and is hereby given to the Board of Directors for making contributions or donations to any bona fide Charitable Funds or Trusts in India for an amount not exceeding five per cent. of average net profits of the company during any three immediately preceding financial years.”


Explanatory Statement as required under Section 102 of the Companies Act 2013

In accordance with the section 181 of the Companies Act 2013, the company is required to obtain approval of the members before making any contribution to any charitable funds beyond a certain amount. The section also requires that the charitable fund should be a bona fide one. The company has identified few bona fide charitable funds in India to whom it would like to donate some funds in the interest of the society.

As per the said section, the aggregate amount of such contribution in any financial year shall not exceed five per cent. of its average net profits for the three immediately preceding financial years. The average net profits of the company for the three immediately preceding financial years is Rs. ................. Hence the company can make a contribution to any bona fide charitable funds for an amount not exceeding Rs. ................

The Board of Directors recommends passing of the resolution set out in Item No. .... of the accompanying Notice.

None of other Director, Key Managerial Personnel of the company and their relatives thereof are interested or concerned financial or otherwise in the proposed 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.

Comments

  1. Krishnakumar7/20/2018

    Thanks for the resolutions format!

    ReplyDelete
  2. Sir I a format for trust providing donation to various charitable objectives

    ReplyDelete

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