MCA vide notification dated 18th November, 2019 amends Rule 15 of Companies (Meetings of Board and its Powers) Rules, 2014 providing for Contract and arrangements with related parties, through Companies (Meetings of Board and its Powers) Second Amendment Rules, 2019.
The rule specifies the thresholds where prior approval of the Company by the way of member’s resolution has to be taken before entering into any transaction with related party. Following are the amendment made in the in the limits specified under the Rule:
1. Sale, purchase or supply of any goods or material, directly or through appointment of agent, amounting to 10% or more of the turnover of the company.
Earlier it was 10% or more of the turnover of the company or Rs. 100 crore, whichever is lower
2. Selling or otherwise disposing of or buying property of any kind, directly or through appointment of agent, amounting to 10% or more of net worth of the company.
Earlier it was 10% or more of the net worth of the company or Rs. 100 crore, whichever is lower
3. Leasing of property any kind amounting to 10% or more of turnover of the company.
Earlier it was 10% or more of the net worth of company or 10% or more of turnover of the company or Rs. 100 crore, whichever is lower.
4. Availing or rendering of any services, directly or through appointment of agent, amounting 10% or more of the turnover of the company
Earlier it was 10% or more of the turnover of the company or Rs. 50 crore, whichever is lower
The complete notification is attached herewith:
MCA amends threshold limits for Related Party Transactions
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26 responses to “MCA amends threshold limits for Related Party Transactions”
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