Amendment in Criteria of Related Party Transactions-
There is a very important Amendment in Criteria of threshold limits for Related Party Transactions (RPT) vide Companies (Meetings of Board and its Powers) Second Amendment Rules, 2019 Dated 18th November, 2019.
Ministry of Corporate Affairs (MCA) had notified amendment in the Companies (Meeting of Board and its Powers) Rules, 2014 and amended criteria for Related Party Transactions (RPT) by amending Rule 15 (3) (a) (i) to (iv) of these Rule.
Following are the amendments in threshold limits for entering into any transaction by any Company with its Related Party, as prescribed under section 188(1) (a ) to (e ) of the Companies Act 2013 , only with the approval of members by way of an Ordinary Resolution .
(a) Sale, purchase or supply of any goods or materials directly or through appointment of agent, amounting 10% or more of the Turnover of the Company.
(“or RS.100 Crore, whichever is lower” is deleted vide this amendment)
(b) 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.
(“or Rs.100 Crore, whichever is lower” is deleted vide this amendment)
(c) Leasing of property of any kind amounting to 10% or more of the turnover of the Company.
(“or 10% or more of Net worth or Rs.100 crore, whichever is lower” is deleted vide this amendment)
(d) Availing or rendering of any services directly or through appointment of agent, amounting to 10% or more of the turnover of the Company.
(“or Rs.50 Crore, whichever is lower” is deleted vide this amendment)
Note:- For the above calculation turnover or Net worth shall be computed on the basis of Audited Financial Statement of The Preceding FY.
