(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 (v) a public company in which a director or manager is a director and holds along with his relatives, more than two per cent of its paid-up share capital (iv) a private company in which a director or manager or his relative is a member or director (iii) a firm, in which a director, manager or his relative is a partner (ii) a key managerial personnel or his relative ( ii) in case of any other company, be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.Ģ(76) Related Party, with reference to a company, means. ( i) in case of, be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both and ( 5) Any director or any other employee of a company, who had entered into or authorised the contract or arrangement in violation of the provisions of this section shall,. ( 4) Without prejudice to anything contained in sub-section ( 3), it shall be open to the company to proceed against a director or any other employee who had entered into such contract or arrangement in contravention of the provisions of this section for recovery of any loss sustained by it as a result of such contract or arrangement. ( 3) Where any contract or arrangement is entered into by a director or any other employee, without obtaining the consent of the Board or approval by a special resolution in the general meeting under sub-section ( 1) and if it is not ratified by the Board or, as the case may be, by the shareholders at a meeting within three months from the date on which such contract or arrangement was entered into, such contract or arrangement shall be voidable at the option of the Board and if the contract or arrangement is with a related party to any director, or is authorised by any other director, the directors concerned shall indemnify the company against any loss incurred by it. ( 2) Every contract or arrangement entered into under sub-section ( 1) shall be referred to in the Board’s report to the shareholders along with the justification for entering into such contract or arrangement. (b) the expression “arm’s length transaction” means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest. (ii) where such office or place is held by an individual other than a director or by any firm, or other, if the individual, firm, private company or body corporate holding it receives from the company anything by way of remuneration, salary, fee, commission, perquisites, any rent-free accommodation, or otherwise (i) where such office or place is held by a director, if the director holding it receives from the company anything by way of over and above the remuneration to which he is entitled as director, by way of salary, fee, commission, perquisites, any rent-free accommodation, or otherwise ( a) the expression “office or place of profit” means any office or place. Provided also that nothing in this sub-section shall apply to any transactions entered into by the company in its ordinary course of business other than transactions which are not on an arm’s length basis. or more members, in number, are relatives of promoters or are related parties: Nothing contained in the second proviso shall apply to a company in which ninety per cent. That no of the company shall vote on such special resolution , to approve any contract or arrangement which may be entered into by the company, if such member is a That no contract or arrangement, in the case of a company having a of not less than such amount, or transactions not exceeding such sums, shall be entered into except with the prior approval of the company by a special resolution ( g) underwriting the subscription of any or thereof, of the company: (f) such related party’s appointment to any office or place of profit in the company, its subsidiary company or associate company and ( e) appointment of any agent for purchase or sale of goods, materials, services or property ( d) availing or rendering of any services ( b) selling or otherwise disposing of, or buying, property of any kind ( a) sale, purchase or supply of any goods or materials ( 1) Except with the consent of the given by a resolution at a meeting of the Board and subject to such conditions, no company shall enter into any contract or arrangement with a with respect to.
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