The Ministry of Corporate Affairs has amended Rule 3 of the Companies (Specification of definitions details) Rules, 2014 and has issued Companies (Specification of definition details) Amendment Rules, 2014 dated 17.07.2014 which shall come into force from the date of publication in the official gazette.
The explanation of Rule 3 readwith 2(76) of the Act, is herein explained as follows:
Rule 3: ‘Related Party’ says that for the purposes of sub-clause (ix) which contains that ‘such other person as may be prescribed’ of clause (76) of section 2 of the Act, in the definition of related party, a director or a key managerial personnel of the holding company or his relative with reference to a company, shall be deemed to be a related party.
Now, the amendment made in Rule 3, is as follows which says that a director ‘other than an independent director’ or a key managerial personnel of the holding company or his relative with reference to a company shall be deemed to be a related party.
The Companies (Specification of definition details) Amendment Rules, 2014 can also be accessed at the link given below:
Companies (Specification of definition details) Amendment Rules, 2014
