How does the Companies Act, 2013 regulate related party transactions?
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Below is a comprehensive legal analysis based on Indian law for your question.
Related party transactions (RPTs) are regulated under Section 188 read with Section 177 of the Companies Act, 2013. Transactions with related parties that are not in the ordinary course of business or not at arm's length require prior approval of the audit committee and board, and approval of shareholders by ordinary resolution for transactions beyond certain thresholds. Non-compliance can render the transaction voidable and attract penalties.
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