Question

Sharma & Co. was incorporated in 1st Jan., 2011. On 1st Nov., 2013 a political party approaches the company for a contribution of Rs. 10 lakhs for political purpose. In this context, which of the following statements is correct?

• A. The company is legally authorised to give this political contribution
• B. The company is not legally authorised to give this political contribution
• C. Any recognised political party is legally authorised to receive this type of political contribution from any newly established company
• D. All of the above

Answer 1

Answer: (B)

The company is not legally authorised to give this political contribution

Incorporated charitable organizations like other corporations are prohibited from making contributions in connection with federal elections. Unlike most other corporations, charities face additional restrictions on political activity under provisions of the Internal Revenue Code.