MCA amends rules for related party transactions by companies requiring special resolution- Notification

MCA amends rules for related party transactions by companies requiring special resolution- Read Notification

Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides the various percentage/criteria etc. for the purpose of proviso to section 188(1) of the Companies Act, 2013 related to transactions with related parties. The said percentage/criteria have been amended. 

Rules for related party transactions amended

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION

New Delhi, the 18th November, 2019

G.S.R. 857(E).—In exercise of the powers conferred by sections 173, 177, 178 and section 186 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Meetings of Board and its Powers) Rules, 2014, namely:—

1. (1) These rules may be called the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2019.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Meetings of Board and its Powers) Rules, 2014, in rule 15, in sub-rule (3), in clause (a),-

(a) in sub-clauses (i) and (ii), the words “or rupees one hundred crore, whichever is lower”, shall be omitted;

(b) in sub-clause (iii), for the words “amounting to ten per cent or more of the net worth of the company or ten per cent or more of turnover of the company or rupees one hundred crore, whichever is lower”, the words “amounting to ten per cent or more of the turnover of the company” shall be substituted; and

(c) in sub-clause (iv), the words “or rupees fifty crore, whichever is lower”, shall be omitted.

[F. No. 1/32/2013-CL-V-Part]

K.V.R. MURTY, Jt. Secy.

Note : The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification number G.S.R. 240(E), dated the 31st March, 2014 and subsequently amended as follows:-

1. G.S.R. 398 (E), dated the 12th June, 2014;
2. G.S.R. 590 (E), dated the 14th August, 2014;
3. G.S.R. 206 (E), dated the 18th March, 2015;
4. G.S.R. 971(E), dated the 14th December, 2015;
5. G.S.R. 309 (E), dated the 30th March, 2017;
6. G.S.R. 880 (E), dated the 13th July, 2017;
7. G.S.R. 429 (E), dated the 7th May, 2018; and
8. G.S.R. 777 (E) dated the 11th October, 2019.

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