CS MOHIT SALUJA (PRACTICING CS Jalandhar 9914558709) (5155 Points)
04 May 2014If there are two companies having same directors and shareholders. One company is selling 80% of its products to the other at arm length price which is in ordinary course of business. Then whether approval is required to be obtained of Board or Shareholders? And now as there are same Directors and Members, then how to obtain the approval?
CS GK Murty
(Company Secretary)
(225 Points)
Replied 05 May 2014
As per section 188 of the CA 2013, nothing in this shall apply to any transactions entered into by the company in its ordinary course of business other than transactions which are not on an arm’s length basis. Hence in your case, approval is not warranted provided it meets the crriteria "Ordinary course of business" & "Arm's length basis".
GST Live Certification Course (39th Batch) - April 2024 (Weekend Batch) (With Certificate)
"Live class on Python for Financial Analysis: Unlocking Efficiency in Accounting and Finance"
CAclubindia
