Shareholder related party Transaction
This query is : Resolved
22 March 2022
shareholder can be related party,only if he has hold shares.
24 March 2022
Related Parties Examples
1. A director or his relative (Relative means a member of the same HUF, husband, wife, father, stepfather, mother, stepmother, son, stepson, son’s wife, daughter, daughter’s husband, brother, stepbrother, sister, step-sister)
Mr L, Mr M and Mr N are directors and the relatives of these Directors are considered as related parties.
2. Key managerial personnel or his relative Say, Mr O is a Company secretary, his relatives will be considered related parties
3. A firm in which a director, manager, or relative is a partner
Mr L is a partner at RST. Pvt. Ltd, another firm. This firm will also be considered as a related party.
4. A private company in which a director, manager, or relative is a member or director Mr. M is a director in M Pvt Ltd – In this case M Pvt. ltd becomes a related party. Even when Mr. M’s relative is a member or director in M Pvt ltd, this company will be considered as a related party.
5. A public company in which a director or manager is a director and holds along with his relatives more than 2% of its paid-up capital
Mr. N along with his relatives holds more than 2% of the paid-up capital of N ltd. In this case, N Ltd will be considered as a related party.
6. Any body corporate whose board of directors, MD or manager is required to act in accordance with the advice, directions or instructions of a director or manager (NA in cases when these directions are followed in a professional capacity) When P Ltd acts on the directions of Mr. L, P Ltd will be a related party.
7. Any person on whose advice, directions or instructions a director or manager is required to act (NA when this is done in a professional capacity) Mr A holding 51% in LMN Ltd on whose advice Mr L has to act will be considered as a related party.
8. Holding, Subsidiary or Associate of such company These all will be considered as related parties:
– ABC Ltd holding 51% in LMN Ltd (Holding Company)
– LMN Ltd holding 51% in XYZ Ltd (Subsidiary Company)
– DEF Ltd holding 30% in LMN Ltd (Associate Company)
9. Any company which is a subsidiary of a holding company to which it is also a subsidiary
1. A director or his relative (Relative means a member of the same HUF, husband, wife, father, stepfather, mother, stepmother, son, stepson, son’s wife, daughter, daughter’s husband, brother, stepbrother, sister, step-sister)
Mr L, Mr M and Mr N are directors and the relatives of these Directors are considered as related parties.
2. Key managerial personnel or his relative Say, Mr O is a Company secretary, his relatives will be considered related parties
3. A firm in which a director, manager, or relative is a partner
Mr L is a partner at RST. Pvt. Ltd, another firm. This firm will also be considered as a related party.
4. A private company in which a director, manager, or relative is a member or director Mr. M is a director in M Pvt Ltd – In this case M Pvt. ltd becomes a related party. Even when Mr. M’s relative is a member or director in M Pvt ltd, this company will be considered as a related party.
5. A public company in which a director or manager is a director and holds along with his relatives more than 2% of its paid-up capital
Mr. N along with his relatives holds more than 2% of the paid-up capital of N ltd. In this case, N Ltd will be considered as a related party.
6. Any body corporate whose board of directors, MD or manager is required to act in accordance with the advice, directions or instructions of a director or manager (NA in cases when these directions are followed in a professional capacity) When P Ltd acts on the directions of Mr. L, P Ltd will be a related party.
7. Any person on whose advice, directions or instructions a director or manager is required to act (NA when this is done in a professional capacity) Mr A holding 51% in LMN Ltd on whose advice Mr L has to act will be considered as a related party.
8. Holding, Subsidiary or Associate of such company These all will be considered as related parties:
– ABC Ltd holding 51% in LMN Ltd (Holding Company)
– LMN Ltd holding 51% in XYZ Ltd (Subsidiary Company)
– DEF Ltd holding 30% in LMN Ltd (Associate Company)
9. Any company which is a subsidiary of a holding company to which it is also a subsidiary
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Taxable or Tax exempt
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- ITDS U/S.194T of Firm
- ADVANCE PAYMENT OF ADVOCATE
- NRI starting business in India
- Invertaded duty struture
- Non-Compliance documents have not been submitted by the contractors debited
- EXPORT COMMERCIAL INVOICE HSN CODE
- GST not cancelled by tenant
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
