Srivathsa TS (Jr. Account Exicutive) (227 Points)
14 May 2014A manufacturing company and service sector company are associate companies. Each company has only 2 directors, who are common among the said companies. Both the directors are "Interested Directors" as per companies act 2013. If the manufacturing comapny has to enter in to contract with the service company how do they make a dicision regarding the contract in the Board Meeting....?
Thanks in Advance
Avneesh Mishra
(CS Trainee)
(502 Points)
Replied 15 May 2014
Please insure the Related Party Transactions must be on arms length basis and under normal course of business.
The Aforesaid transactions should be approved by Audit Committee of the Directors.
Jyotika
(study study n study)
(147 Points)
Replied 17 May 2014
Hi do they have 2% or more shareholding as well.
if that is the case then pass SR whether required or not by specifically clarifying director's interest.
or for the time being appoint two more directors and pass resolution.
Regards
Jyotika
CAclubindia
