Can a Private / Public Limited company execute a gift deed? Should the donee be a close relative of the doner?
Shailesh Kr. Shah (Advocate) 16 October 2012
how can a company,execute gift deed ?
what is the object of the company?
S Jadhav 98336 98330 (Jadhav & Associates) 16 October 2012
A gift is given to someone for which the consieration from that "someone" is love and affection.
Since a company is an artificial person, it cannot claim to get or give love and affection. Hence a company cannot give gifts and hence cannot execute a gift deed. The donee and donor need not be related to give gifts but they should have some interaction otherwise how can love and affection develop between them?
However, there are various status under which a property can be transferred by a company or to a company without monetary consideration. e.g. if it is a section 25 company then it can receive gifts/donations.
narendra.s.p (Chief Manager(Law)) 20 October 2012
A company has executed a gift deed in afavour of one of its directors in respect of an immoveable property acquired by it. The donee wants to avail personal loan from the Bank [Housing Loan] on the seurity of the property. Now, as per section 122 of the TP Act, a transaction of Gift is without consideration. The transaction is between two persons - the Donor & donee. "Person" can also mean and include a company.
The objects clause or Articles of association of the company do not prohibit transfer by way of Gift.
Shailesh Kr. Shah (Advocate) 20 October 2012
M. A. Khan (advocate) 08 November 2012
i don't agree with mr. shah, company can also gift its property to director, provided Article of Association permits it.
S. Bharath (Advocate and Arbitrator Formerly Civil Judge) 19 October 2021
I agree with Mr. M. A. Khan. Section 122 of the Transfer of Property Act does not talk about love or affection, while defining a gift. It only says that such a transfer must be voluntary and without consideration. Therefore, in my opinion, we need not discuss the concepts of love and affection, to answer the query. Best wishes!