On November 18, 2019, the Ministry of Corporate Affairs issued a notification to amend the Companies (Meetings of Board and its Powers) Rules, 2014 (“Principal Rules”) by the Companies (Meetings of Board and its Powers) Second Amendment Rules, 2019 (“Amendment Rules”).
As per section 188 of the Companies Act, 2018 (Related party transactions) read with Rule 15 of the Principal Rules (Contract or arrangement with a related party), prior approval of the board of directors is required for certain transactions with a related party. The Amendment Rules seek to amend Rule 15 of the Principal Rules which provides, inter alia, the threshold for such transactions, as follows:
The Amendment Rules came into force with effect from November 18, 2019.
This update has been contributed by Aastha (Partner) and Shradha Rakhecha (Associate).
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