A Ltd hold share of B Ltd as Trade investment. Mr. Lee is director in both the company. Now A Ltd want to sale this "investment" to Mr. Lee. Whether this transaction is within the meaning of related party transaction as per sec 188 of Co. Act 2013?
7 Replies
karan jit singh
(Consultant)
(1299 Points)
Replied 13 October 2015
Please mention the amount of transaction and net worth of both the companies. If transaction amount is more than threshhold set out by section 188 then
Consent in bm reqd
Special resolution reqd
Disclosure in explanatory st reqd
In agenda disclosure reqd
mamta
(cs)
(28 Points)
Replied 13 October 2015
As per my opinion it is a related party transaction under section 188 becoz this section covers the transacion of sale and purchase of goods and share is also treated as a goods. take others views also.
priyanka maheahwari
(article)
(21 Points)
Replied 13 October 2015
Yes I also agree with the given by Mamta
Hitesh Khandhadia
(CA Practice )
(133 Points)
Replied 14 October 2015
Dear Mahesh,
Prior to analyzing the transaction it is improtant to evaluate the relation between Company A and the director invloved.
Accordingly, as per Section 2(76), Company and Director are related only if the Concerned Director is a Managing Director of Company A Ltd.
Regards
Hitesh Khandhadia
Mahesh
(CA Student)
(338 Points)
Replied 15 October 2015
Thank you all, I Read 2(76) only director word is written I could not found MD, correct me if I am wrong
| (76) | "related party", with reference to a company, means— |
| (i) | a director or his relative |
Mahesh
(CA Student)
(338 Points)
Replied 15 October 2015
can Share is come under the meaning of "Property of any kind"
Hitesh Khandhadia
(CA Practice )
(133 Points)
Replied 15 October 2015
Managing Director gets covered under KMP
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