Political donations
Political donations

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Political donations
  • Definitions
  • Political parties, organisations and independent election candidates
  • Political donation
  • Political expenditure
  • Shareholder authority
  • Requirement to obtain shareholder authorisation
  • Exemptions
  • Form of resolution
  • Subsidiary and holding companies
  • More...

Part 14 of the Companies Act 2006 (the CA 2006) and the Political Parties, Elections and Referendums Act 2000 (PPERA 2000) contain provisions which control:

  1. political donations made by companies to political parties, to other political organisations and to independent election candidates, and

  2. political expenditure incurred by companies

Although few companies make direct political donations or incur direct political expenditure, the definitions under the CA 2006 and PPERA 2000 are wide and may catch types of donation and expenditure that are not overtly political. For this reason, many companies propose a standard resolution at each year's annual general meeting (AGM) to approve political donations and political expenditure.

For an example of a shareholder resolution approving political donations and expenditure, see Precedent: Notice of AGM of a listed public company.

Definitions

Political parties, organisations and independent election candidates

A political party must comply with CA 2006, Pt 14 if it is registered under PPERA 2000, Pt 2.

CA 2006, Pt 14 applies to a political organisation if it carries on, or proposes to carry on, activities that are capable or being reasonably regarded as intended:

  1. to affect public support for a political party to which, or an independent election candidate to whom, the CA 2006, Pt 14 applies, or

  2. to influence voters in relation to any national or regional referendum held under the law of the UK

CA 2006, Pt

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