Private companies may be exempted from complying with the new company law provisions on related party transactions (RPTs).
This forms part of several relaxations proposed by the Corporate Affairs Ministry (MCA) for private firms.
The
Ministry has now come out with a draft notification which, among other
things, provides for exemption to private companies with regard to
compliance with provisions on related party transactions.
The
new company law had wanted private companies to comply with detailed
provisions on such transactions, including the most stringent one of
seeking nod from disinterested directors and shareholders.
“The
latest MCA proposal will free private companies from the hassle of
getting disinterested vote and should definitely bring cheer to them,”
Lalit Kumar, Partner, J Sagar Associates, a law firm, told
Business Line
. Getting a disinterested vote is generally not possible in a private
company situation