Framework
Companies Act – Sections 177 & 188
SEBI (LODR) – Regulation 23
Accounting – AS 18, Ind AS 24
What is a Related Party? (Answered as per Companies Act)
- Individual Sense :-
- Director, Relative of Director
- KMP, Relative of KMP
- Director (and his/her relative) of Holding Company (Except Independent Director)
- KMP (and his/her relative) of Holding Company
- Firm in which Director/Manager (incl. relatives) are partners
- Pvt. Company in which Director/Manager (incl. relatives) are Directors/Members
- Public company in which Director/Manager are Directors AND holds >2% of voting power (along with relatives)
- Corporate Sense :-
- Holding, Subsidiary & Associate
- Fellow Subsidiary
- Investor/ Venturer (Company)
Related party as per SEBI (LODR)
[Companies Act] + [AS/Ind AS] + [Any person/entity * belonging to the *promoter/promoter group of the listed entity and holding >20% of shareholding]
Related party as per AS 18
- Holding companies, Subsidiaries and Fellow subsidiaries
- Associate, JV, Investor & Venturer companies
- Individuals having Control (holding >50%)/Significant influence (holding >20%) and their relatives
- KMPs & their relatives
- Enterprises over which KMPs/major shareholders exercise significant influence
Related party as per Ind AS 24
- A person or a close family member having Control (holding >50%) / Significant influence (holding >20%) / KMP of (company or its holding) [Also includes an entity which is controlled/jointly controlled by the person]
- Companies of same Group (Holding, Subsidiaries, Fellow subsidiaries)
- Associate, JV, Investor & Venturer companies (any combination within the group except the Combination of “2 Associates”
- Employee trusts (post-employment benefit plan)
- An entity over which the Person [who is holding >50% of the Reporting entity) has Significant influence (holding >20%) / KMP of (company or its holding).
