Question

Approval of the members under section 188 of the companies act shall be obtained by way of

Answer 1

Explanation:

Section 188 of Companies Act 2013 is about Related Party Transactions and applicable to both Private and Public limited company and is applicable from 1St April 2014.

a) A Director or A key Managerial Person or their relative.

b) A firm in which Director, Manager or his relative is a partner.

Answer 2

Explanation:

188. Related party transactions

(1) Except with the consent of the Board of Directors given by a resolution at a

meeting of the Board and subject to such conditions as may be prescribed, no company shall

enter into any contract or arrangement with a related party with respect to—

(a) sale, purchase or supply of any goods or materials;

(b) selling or otherwise disposing of, or buying, property of any kind;

(c) leasing of property of any kind;

(d) availing or rendering of any services;

(e) appointment of any agent for purchase or sale of goods, materials, services

or property;

(f) such related party's appointment to any office or place of profit in the company,

its subsidiary company or associate company; and

(g) underwriting the subscription of any securities or derivatives thereof, of the

company: