Hello All,
There are 3 companies. A Ltd, B Ltd, and C Ltd.
B Ltd and C Ltd are subsidiaries of A Ltd.
If an employee of B Ltd buys shares of A Ltd or C Ltd, will this amount to a related party transaction?
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Whether Employee purchasing shares of fellow subsidiary company is RPT?
Replies (2)
Quick Summary
Employee doesn't come under related party definition as per Act. Unless he is employee in capacity of KMP. Further purchase of shares also doesn't come under RPT as given in Sec. 188 of the Act.
Employees are creditors and not related party
As per AS-18 a relative broadly includes-
- Associate Companies
- Subsidiaries
- Fellow Subsidiary
- Intermediary Companies
- Controlled Companies
- Holding Company
- Key Managerial Personnel and there relatives
- Individuals owning direct or indirect interest in Enterprise the voting power of the reporting enterprise or having significant influence over the reporting company or relatives of such individuals.
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