Ministry of Corporate Affairs
The Companies (Donations to National Funds) Act, 1951, is a specific piece of legislation that empowers companies to donate to certain national funds in India, even if their memorandum or articles of association do not explicitly allow it. This Act facilitates charitable contributions to nationally significant causes by corporate entities and is relevant to corporate social responsibility and national development.
Act Background and Ministry:
The Companies (Donations to National Funds) Act, 1951 is a specific Central Act that does not have an administering ministry. It is a piece of law that impacts the operation of companies and their powers of charitable donation.
Enactment Date, Number of Chapters, Number of Sections:
The Act was enacted on 17th October 1951, and it consists of 4 sections and it has no chapters.
Act Governed By:
The Act is governed by the Companies Act, 1913, the Indian legal system, and the Ministry of Corporate Affairs.
On Whom it is applicable:
The act applies to all companies registered under the Companies Act, including those deemed to be registered as per section 2B of that Act. It applies to companies across India, except for those in the state of Jammu and Kashmir.
Penalties/Punishments:
This is an enabling act. It doesn’t prescribe any specific penalties or punishments for violation of its provisions. Instead, it permits the companies to make donations in the specified manner, without the requirement for changes in their memorandums or articles. It facilitates the donations.
Important Pointers:
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Power to Donate: The Act empowers companies to donate to specified national funds, even if such donations are not explicitly permitted by their memorandum or articles of association.
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Extraordinary Resolution: Companies are required to pass an extraordinary resolution in accordance with section 81 of the Companies Act, 1913 to authorize such donations.
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National Funds: The Act specifies the permissible national funds as Gandhi National Memorial Fund and Sardar Vallabhbhai National Memorial Fund. It also authorizes the Central Government to approve other funds of national importance.
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Overriding Effect: This Act has an overriding effect over the Companies Act and any other law for the time being in force, which is particularly about the powers and scope of the company.
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Purpose: The primary purpose of the Act is to enable companies to contribute to causes of national importance. This helps companies participate in social causes and national building.
Act Copy: