What is Related Party Transaction Compliance?
Nexa Consultancy | Startup & Finance Glossary
Transactions between a company and its related parties (such as directors, their relatives, or other companies they control) are regulated by Section 188 of the Companies Act.
Startup Example: A startup wants to take an unsecured loan from one of its directors. This is a related party transaction. Depending on the amount, it may require approval from the Board of Directors and, in some cases, a special resolution from shareholders.
Managing these complexities is part of our Corporate Law advisory.