Relatives of directors or managers in a private company would render it a related party under section 2(76)(iv)

To be published in the Gazette of India, Extraordinary,  Part II, Section 3, Sub section (ii)]

GOVERNMENT OF INDIA

MINISTRY  OF CORPORATE AFFAIRS

ORDER

New Delhi, The 24 ^th July, 2014

S.O.      (E) Whereas  the Companies Act,  2013  (18 of 2013)  (hereinafter referred to as thesaid Act) received the assent of the President on 29th August, 2013 and section 1 thereof came into force on the same date;

And whereas clause (76) of section 2 of the Act, which provides for definition of the term "related party'' has come into force on 12th September, 2013;

And whereas difficulties have arisen in interpreting the said clause due to the absence of the word "relative" in sub-clause (iv), although such word has occurred insub-clauses (i), (ii}, (iii) and (v} of the aforesaid clause (76) resulting in a disharmonious interpretation of the said definition.

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 470 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following Order to remove the aforesaid difficulties, namely:-

1.  Short title  and  commencement.-   (1)  This  Order  may  be .called  the Companies (Removal of Difficulties) Sixth Order, 2014.

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

2. Amendment of section 2.- In section 2 of the Companies Act, 2013, in clause (76), in sub-clause (iv), after the word "manager", the word "or his relative" shall be inserted.

(F.  No.  2/14/2014-CL.V)

Amardeep Singh Bhatia,
Joint Secretary