Related party

Co Act 2013 178 views 3 replies

Ajay Quirine Miranda

jeppu.dakshina kannada

45 Points Joined May 2014

My query is regarding whether Board Resolution needed or not?

The situation is there is a Director named Anup Mehta of a Company who is also a KEY MANAGERIAL PERSON. His son Kush Mehta draws Salary in that company as he looks after a business too. But Kush ie son is neither a Director nor MD.

My question is

1)Whether Board resoution needed for Relative Party for drawing Salary as he falls under relative, If do kindly support with relevant section.

Thank you,

Regards,

Ajay

Replies (3)

Priyansh Bafna

6 Points Joined August 2017

As much as I know, if Transaction is at arm's length price, then at end of year or after end of year, these Transactions are placed before board stating that Transaction were at arm's length price therefore no prior approval taken.
But if Transaction are not at arm's length price, then prior approval must be taken by resolution. Just confirm these provisions before proceeding further