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CMA Intermediate · Business Laws and Ethics · Employees State Insurance Act, 1948

Under the Employees' State Insurance Act, 1948, the ESI Corporation receives a donation from a private trust for the purposes of the Act. Which statement is correct?

The Corporation may accept the donation. The Act allows it to accept grants, donations and gifts for the purposes of the Act from governments, local authorities, and any individual or body, whether incorporated or not. A private trust therefore qualifies, and no incorporation or prior approval requirement is stated.

  1. AThe Corporation may accept it, since it can take grants, donations and gifts from any individual or body whether incorporated or notCorrect
  2. BThe Corporation can accept donations only from the Central Government
  3. CThe Corporation can accept donations only from incorporated companies
  4. DThe Corporation can accept it only after the Central Government approves each donation in writing

Explanation

Section 26(2) lets the Corporation accept grants, donations and gifts from the Central or any State Government, a local authority, or any individual or body whether incorporated or not, for all or any of the purposes of the Act. Thus a private trust is a valid donor, and no prior approval or incorporation requirement is stated.

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