Political Donations and your Company
Posted on by Ceri John
Well you simply cannot avoid the talk of the General Election and BIRR Legal Services thought we would ignore the debate and make things relevant to you and your company.
So with that in mind we approach the topic of Political Donations.
If your company is looking to make a donation to a political party you should consider a few factors.
Part 14 of the Companies Act 2006 now specifically relates to donations to ‘political organisation’ by limited companies and before giving away any of your money we advise you take a real look at this section of the act.
First of all, what does the statute exactly consider a political organisation?
The law states that a political organisation means an organisation which carries on, or purposes to carry on, activities capable of being regarded as intended to affect public support for a political party to which, or an independent election candidate to whom, this part of the Act applies in relation to any national or regional referendum.
It’s worth remembering then that means it’s not just a donation to one of the major parties but any organisation that may be working towards or supporting a candidate in any form.
The most important point in all of this however is that if your company is looking to donate to a ‘political organisation’ it can only do with approval from its members (s.366)
Donations include gifts of money or property, the provision of sponsorship, subscriptions and affiliation fees, money spent to meet expenses, and loans, property services and other facilities provided on other than commercial terms.
Political expenditure is considered something different and includes payments such as preparation, publication or dissemination of advertising or other promotional or publicity material which is capable of being regarded as intended to affect public support for a political party or independent election candidate.
You’ll need to ensure a valid resolution is passed within the company before making any donation. Unless the directors or articles reduce the period, the approved resolution may authorise the making of a donation for a period of not more than four year commencing with the date of the passing of the resolution up to a value specified in the resolution.
Categories: Information, Topical