Explanation:

Funds of Trade Union

A registered trade union is entitled to maintain two kinds of funds. They are – General Fund and Political Fund. The Trade Unions Act, 1926 imposes certain conditions on the Trade Unions to spend/utilize the funds only for some specific purposes as stated under Section 15 (General Fund) and Section 16 (Political Fund) of the act.

According to Section 16, the trade union must create a separate political fund for the purpose of spending it for political cause. Contributions to such political funds should be collected separately. Contribution to the political fund cannot be compelled or made as compulsory or condition to admit a person as member of the trade union. However, the control and management of the political fund can be vested exclusively to those members who contributed to the political fund. Section 16(2) specifically states the purposes for which the political fund may be utilized. Those are:

1. The payment of any expenses incurred by a candidate or prospective candidate for election as a member of any legislative body or any local authority. The expenses include the expenses incurred before, during and after the election in connecting with such candidature;
2. Conducting any meeting or distribution of any literature or documents in support of such candidate or prospective candidate;
3. Maintenance of any person who is a member of any legislative body or local authority;
4. Registration of electors or the selection of a candidate for any legislative body or local authority;
5. Conducting of political meetings or distribution of political literature and documents to the members of the trade union or to the general public.