MCA CIRCULAR ON RELATED PARTY TRANSACTION’
Dear,
MCA vide its circular No. 30,2014, dated 17th
July 2014 has issued clarifications on matters relating to ‘Related Party
Transaction’ these are as follow;
1. Scope of second proviso to section
188(1) :- Second proviso to sub-section (1) of Section 188
require that no member of the company shall vote on a special resolution to
approve the contract or arrangement (referred to in the first proviso), if such
a member is a related party. It is clarified that ‘related party’ referred to
in the second proviso has to be constructed with reference only to the contract
or arrangement for which the said special resolution is being passed. Thus the
term ‘related party’ in the above context refer only to such related party as
may be a related party in the context of the contract or arrangement for which
the said special resolution is being passed.
2. Applicability of Section 188 to
corporate re-structuring, amalgamation etc. :- It is clarified
that transaction arising out of Compromises, Arrangements and Amalgamations
dealt with under specific provisions of the Companies Act 1956/ Companies Act,
2013, will not attract the requirement of section 188 of the Companies Act,
2013.
3. Requirement of fresh approvals for
past contract under section 188. :- Contract entered into by
the companies, after making necessary compliances under section 297 of the
companies Act, 1956, which already came into effect before the commencement of
section 188 of the Companies Act, 2013, will not require fresh approval under
the said section 188 till the expiry of the original term of such contracts.
Thus if any modification in such contract is made on or after 1st
April, 2014, the requirements under section 188 will have to be complied with.
http://mca.gov.in/Ministry/pdf/Circular_No_30_17072014.pdf
-
Thanks & Regards:
KASHIF ALI & ASSOCIATES
Company Secretaries
268, Business India Complex,
Uday Park, New Delhi-110049
Call us : +91 9718483209
No comments:
Post a Comment