Related party transaction urgent
This query is : Resolved
24 August 2014
sir please solve following question on RPT
A pvt ltd company having 5 directors all are brothers by relation and they all are only shareholders of the company.
and
in a partnership firm all above directors are partners.
they supply goods from company to firm in which all above directors are partners. ( 90% of companies revenue from sale to firm )
How to compliance of section 188 Companies Act, 2013.
all directors and members are interested in transaction..
A pvt ltd company having 5 directors all are brothers by relation and they all are only shareholders of the company.
and
in a partnership firm all above directors are partners.
they supply goods from company to firm in which all above directors are partners. ( 90% of companies revenue from sale to firm )
How to compliance of section 188 Companies Act, 2013.
all directors and members are interested in transaction..
25 August 2014
the transaction appears to be in ordinary course. Ensure that the transactions are at arms length between the interested parties. No approval would then be required.
25 August 2014
Thank you very much sir
What if the Transaction not on arms length basis.?
or
Not in ordinary course of business. ?
What if the Transaction not on arms length basis.?
or
Not in ordinary course of business. ?
25 August 2014
Then it would require special resolution of the non-interested shareholders, which would not be possible in your case since all shareholders are interested.
Hence, the transaction would have to be necessarily at armslength, otherwise penal provisions would be attracted.
Hence, the transaction would have to be necessarily at armslength, otherwise penal provisions would be attracted.
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