Who is a "related party" as defined in Section 2 (76)?

CS Executive · Company Law · PYQS · June 2019
Who is a "related party" as defined in Section 2 (76)?

Answer & Explanation:

According to Section 2(76) of the Companies Act 2013 , "related party", with reference to a company, means- a director or his relative; a key managerial personnel or his relative; a firm, in which a director, manager or his relative is a partner; a private company in which a director or manager or his relative is a member or director; a public company in which a director or manager is a director and holds along with his relatives, more than two per cent (2%) of its paid-up share capital; any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager; any person on whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity; any body corporate which is- a holding, subsidiary or an associate company of such company; a subsidiary of a holding company to which it is also a subsidiary; or an investing company or the venturer of the company. Explanation .-For the purpose of this clause, "the investing company or the venturer of a company" means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate. such other person as may be prescribed;

Topics: Related Party Transactions

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