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Related party
X Ltd propose to take on lease an immovable property from Its related party. As per Companies Act, 2013 does this qualify as Related Party Transaction ? Act says 'Leasing Property of any kind' so I'm of the view that only if the property belonging to the company is given on lease to the related party will qualify as RPT and not when the property belonging to the related party is taken on lease. Is this correct interpretation?
Replies (1)
The text goes like this " No company shall enter into ANY CONTRACT OR ARRANGEMENT with a related party with respect to leasing of property of any kind"
I think even if the company is taking property on lease it is still a CONTRACT related to lease. So it should be a related party transaction.
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