Contributions to Political Parties by Companies

Section 182 of the Companies Act permits companies to contribute amounts, directly or indirectly to a political party subject to limitations and disclosure requirements laid down therein. Giving this information in written reply to a question in the Rajya Sabha, Shri Sachin Pilot, Minister for Corporate Affairs, said that it has recently been clarified that companies making contributions to a political party or parties through ‘Electoral Trust Companies’ constituted in pursuance of the scheme notified by the Ministry of Finance will be required to only reflect the amount contributed by them to an Electoral Trust company in its books of accounts. The Electoral Trust Companies are, however, required to indicate the amounts passed on to them to a political party or parties in the manner laid down in Section 182(3).