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Important Post

25.7.14

MCA- amends 'Related party' u/s 2(76) of cos Act

MCA has through its order dtd 24/07/2014 inserted the word ‘relative’(after the word ‘manager’)  into the definition of related party under section 2(76) (iv) of the Companies Act 2013. The definition to be read as follows-
                                                    
“related party”, with reference to a company, means—

(i) a director or his relative;

 (ii) a key managerial personnel or his relative;

(iii) a firm, in which a director, manager or his relative is a partner;

(iv) a private company in which a director or manager or his relative is a member or director;

(v) a public company in which a director or manager is a director or holds along with his relatives, more than two percent. of its paid-up share capital;

(vi) 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;

(vii) 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;

(viii) any company which is—
(A) a holding, subsidiary or an associate company of such company; or
(B) a subsidiary of a holding company to which it is also a subsidiary;

(ix) such other person as may be prescribed;
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