Dear All,
Directors of a Co. holding more than 2% shares and the said directors are on Board of other Co/Subsidiary Co.
The transaction between these two companies shall be noted in Contract of Register.
Can a tracsaction u/s 184 entered between these two companies be ratified whithin 3 months after the date of contract in manner same as mentioned in sec 188.
Request for ur guidance.
- Boith companies are related parties u/s 2(76)
- Section 188 will not apply if the transaction is in the ordinary course of business and at arms length.
- Prior approval of members will be required in case the transaction is covered nder Rule 15(3) of Companies (Meetings of Board & its Powers) Rules 2014
Respected Sir,
If the transaction is not covered under rule 15(3) of Companies (Meetings of Board & its Powers) Rules 2014, Whether ratification of contract by the Board of Directors is permissible.
CAclubindia
