A Director of a company leases out his office space to his company for a consideration i.e monthly rent. Does it come under the purview of Related Party Transaction. If yes, What procedure is required to be followed for shifting RO of the Company, what steps are to be taken to be in conservant with RTP Transaction? Format of BR for the same?
2 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 15 September 2020
1 ) As per section 2(76) of the companies act 2013 , a director or his relative are related party .
2) As per section 188 (1) (c) of the companies act 2013 - except with the consent of the Board of Directors given by resolution at the meeting of the Board and subject to such condition as may be prescribed no company shall enter into contract or arrangement with a related party with respect to leasing of property of any kind .
So you have pass resolution first . Go through companies act 2013
mayur borhade
(113 Points)
Replied 22 September 2020
Also note that if transaction between Director and company is arm's length basis then there is no requirement to pass any resolution.
Refer section 188 again.
Refer section 188 again.
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