Related party transaction

Save Share

This query is : Resolved

SHAMBHU YADAV (Querist)

27 December 2014 Dear Friends,
In a Private Company, A & B are the only 2 directors and also the only 2 members. As per the provisions of Section 188 (1) of the Companies Act, 2013, the interested members cannot vote on special resolution and As per Rule 15 (2) of the Companies (Meetings of Board and its Powers) Rules, 2014, interested directors shall not be present in the meeting during discussion of related party transactions.

In this situation, how they will pass resolution in Board meeting and also in General Meeting for approval of related party transaction.
Please suggest,,,,,,,,!!!

CA Robin Betala

CA Robin Betala (Expert)

27 December 2014 Q. How do we handle related party contract cases wherein the Company has only husband and wife as both Directors and members in a Company?

R:-These types of Companies have to bring in two outsiders as shareholders giving one share each and pass special resolutions for all related party contracts in a General Meeting and file E Form No.MGT14 and register such special resolutions. This is the only way these contracts could be regularized at least for the time being till the Ministry comes out with some relaxations/clarifications.

Source:-
https://taxguru.in/company-law/section-188-related-party-transaction-companies-act-2013.html

Message likes : 1 times

SHAMBHU YADAV

SHAMBHU YADAV (Querist)

29 December 2014 Thank you very much sir for quick reply,

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now