Company Branches in Profit and Loss: Will Bonuses Still Be Given?

shreyan-paul
If there is more than one branch of a company, and some branches are making a profit while others are making a loss, what will happen in that case? Will the company making a loss give a bonus?
umakanthan53
As per Section 3 of the Payment of Bonus Act, 1965, an establishment under the Act includes departments, undertakings, and branches. If some branches of the same company are making profits, it is considered that the company as a whole has lost its infancy status unless a particular branch has its own balance sheet. Therefore, even though other branches are making losses, you must treat the company as an organic whole and pay a bonus to the employees of all branches based on the quantum of allocable surplus in the accounting year.
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