A private limited company purchases with its related party is more than 20% of his turnover (Transaction is normal course of business and at arm length ). Now question is:-
1. Company has to file AOC-2 with transaction.
2. Can be approve in board or it should be approve in members meeting.
3. Resolution can be take for the period more than one year (say for 5-6 year at one time) or it shall be restricted for one financial year
4. MGT -14 should be file for this resolution.(Board/Members resolution)
09 February 2017
As per section 188 , if the transactions are at arm length basis and in the orsinary course of business , then no need to pass any board resolution or ordinary resolution but the entry as to be entered in register of contracts in form mbp 4 and as per companies accounts rule, the details of such transactions with related party shall be given in AOC 2. nO NEED TO FILE mgt 14 IN CASE OF Private Limited Company
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