What is related party ?

General term related party mean a party which has some relation with company key persons.

According to company Act 2013 section 2(76) define related party

2(76)     “related party”   with reference to a company, means-

i. A director or his relative;

ii. A key managerial personnel or his relative;

iii. A firm, in which a director, manager or his relative is a partner;

iv. A private company in which a director or manager 1[or his relative] is a member or director;

v.  A public company in which a director or manager is a director 2[and] holds along with his relatives, more than two per cent of its paid-up share capital;

vi.  Any body corporate whose Board of directors, managing director or manager is accustomed to act in according with the advice, directions or instructions a director or manager;

vii. Any person on whose advice, directions or instructions a director or manager is accustomed to act:

Provided that nothing in sub-clauses (6) and (7) shall apply to the advice to the advice, directions or instructions given in a professional capacity;

viii.3[any body corporate which is-

A .A holding, subsidiary or an associate company;

B.A subsidiary of a holding company to which it is also a subsidiary; or

C.An investing company or the venture of the company;

Explanation.- For the purpose of this clause, “the investing company or the venture of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate;]

ix. Such other person as may be prescribed: