![]() (a) the expression “office or place of profit” means any office or place. Provided also that the requirement of passing the resolution under first proviso shall not be applicable for transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval: Provided also that nothing in this sub-section shall apply to any transactions entered into by the company in its ordinary course of business other than transactions which are not on an arm’s length basis. or more members, in number, are relatives of promoters or are related parties: Provided also that nothing contained in the second proviso shall apply to a company in which ninety per cent. Provided further that no member of the company shall vote on such resolution, to approve any contract or arrangement which may be entered into by the company, if such member is a related party: Provided that no contract or arrangement, in the case of a company having a paid-up share capital of not less than such amount, or transactions not exceeding such sums, as may be prescribed, shall be entered into except with the prior approval of the company by a resolution: (g) underwriting the subscription of any securities or derivatives thereof, of the company: (f) such related party’s appointment to any office or place of profit in the company, its subsidiary company or associate company and (e) appointment of any agent for purchase or sale of goods, materials, services or property (d) availing or rendering of any services (b) selling or otherwise disposing of, or buying, property of any kind ![]() (a) sale, purchase or supply of any goods or materials (1) Except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to. ![]() Related Party Transactions (Notified Date of Section: ) Consequences of not complying with provisions of section 188 of Cos. the way or methods to determine such arm’s length andĬ. the requirement of Related Party Transaction(s) (RPT) to be at arm’s length under the CoA ī. Provisions under the Goods and Services Tax ActĪ. Regulations and compliances under section 188 of the Companies Act, 2013 (Cos. Regulations stipulated by Securities and Exchange Board of India (SEBI)Į. Accounting Standard (AS) 18 – Related Party Disclosures and Indian Accounting Standard (Ind AS) 24 – Related Party Disclosuresĭ. Disclosure Requirements under the Indian GAAPs viz. Chapter X pertaining to Transfer Pricing provisions under the Income-tax Act, 1961 (“the Act”)Ĭ. These laws and regulations have evolved over the time and implemented to constantly keeping checks on the business entities or groups so that no undue advantage is taken by these entities being the related parties who can control the transactions amongst themselves. Therefore, in this relation there are various laws and regulations implemented by various authorities at various levels to curb the mischiefs or negative impact on the operations of the business entities in the interest of various stakeholders. This is due to the reason that such transactions are highly subject to or prone to the tax avoidance, tax evasion, shifting of profitability from one related entity to the other related entity which might result in loss to the Revenue and other stakeholders. The issue of the transactions between the related parties or associated parties have always been a matter of great concern for the revenue authorities along with other authorities along with the other stakeholders of the business of the entities.
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