Tag Archives: Related Party

RELATED PARTY


The Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations 2015 was notified on 2nd September 2015 and will come into force from 1st December 2015. In this post we will discussion definition of Holding, Subsidiary, Associates, Relative, Related Party, and Related Party Transactions.

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ORDERS ISSUED UNDER COMPANIES ACT 2013


Until 31st march 2014, Ministry of Corporate Affairs has issued three orders. These orders were issued in exercise of the powers conferred by sub-section (1) of section 470 of the Companies Act, 2013 to remove the difficulties.

The Companies (Removal of Difficulties) Order, 2013

First order is; the Companies (Removal of Difficulties) Order, 2013 published on 20th September 2013 and come into force that day. The order reads:

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CONTRACTS INVOLVING DIRECTORS


Contracts in which directors are involved are one of major corporate governance issue. Many corporate failures may be attributed to contracts related to directors under some intention which are not in consistency with fiduciary duties of directors. We have already discussed contract in which directors are interested and related party transaction in this earlier post.

REGISTER OF CONTRACTS OR ARRANGEMENTS IN WHICH DIRECTORS ARE INTERESTED (SECTION 189):

Every director or key managerial personnel shell within a period of thirty days of his appointment disclose to the company particulars relating to his concern or interest in other companies or organisation.

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Interests of Director and Related Party Transactions


UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

DISCLOSURE OF INTEREST BY DIRECTOR (SECTION 184, SUB SECTION 1):

Every director shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals which shall include the shareholdings, in such manner as may be prescribed. Such disclosure shall be made on three particular point of time:

(i)           At the first meeting of the Board in which he participates as a director;

(ii)          At the first meeting of the Board in every financial year; and

(iii)         Whenever there is any change in the disclosures already made, then at the first Board meeting held after such change.

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