This article outlines the necessary approvals from Audit Committees, Boards, and shareholders for related party transactions, guiding companies in compliance with the Companies Act and SEBI regulations.
Approval Framework for Related Party Transactions
The article elaborates on the requisite levels of approval for Related Party Transactions (RPTs) within both listed and unlisted companies as per the Companies Act and SEBI regulations. It provides a practical framework for determining when audit committee, board, and shareholder approvals are necessary.
Understanding the nuances of these regulatory requirements is crucial for companies, as violations can lead to penalties and reputational damage. This framework serves as a guideline for corporate compliance officers to assess the implications of engaging in RPTs.
Legal practitioners should ensure their clients are well-informed about the approval processes required for related party transactions to mitigate risks associated with potential regulatory non-compliance.
Citations
- Companies Act (2026)
