RELATED PARTY TRANSACTION ("RPT")

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Related Party Transaction means a business transaction with a related party as defined under the Companies Act, 2013

Board Approval:
No Company can enter into contract or arrangement with a related party except with the consent of the Board in the matter of (a) sale, purchase or supply of any goods or materials (b) selling or otherwise disposing of or buying property of any kind (c) leasing of property of any kind (d) availing or rendering of any services.

Shareholder Approval:
Irrespective of the company's paid-up capital if the related party transaction crosses the size threshold laid down in rule 15(3) of Companies (Meetings of Board and its Power) Rules, then the transaction requires shareholder approval via ordinary resolution.

SEBI LODR Regulations, 2015:
It provides that all material related party transactions would require ordinary resolution. Thus, both unlisted and listed companies are at par with regard to the passing of an ordinary resolution in case of related party transactions.



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