Navigating Corporate Social Responsibility: Can Compliance Under Section 135 Of The Companies Act, 2013 Reduce The 5% Threshold Prescribed By Section 181?
Vaibhavi Pedhavi, B.A. LL.B. (Hons.), Gujarat National Law University, Gandhinagar
Jane Lalnunsiami, B.A. LL.B. (Hons.), Gujarat National Law University, Gandhinagar
ABSTRACT
In the realm of corporate social responsibility, understanding the interplay between compliance under Section 135 of the Companies Act, 2013, and the 5% threshold outlined in Section 181 becomes crucial. After analysing both the sections independently, the main question arises is whether the expenditure incurred through trust or societies for Corporate Social Responsibility (CSR) purposes, be considered in calculating the 5% prescribed limit specified by Section 181? The present research article aims to delve into a legal analysis of both these sections, and attempts to clarify the complex relationship between CSR contributions by the company and donations made to bona fide charitable trusts and other funds under Section 181. By exploring these legal aspects, author attempts to offer valuable insights into navigating Corporate Social Responsibility within the legal framework of the Companies Act, 2013.
