Related Party Transaction (RPT)
- November 25, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Related Party Transaction (RPT)
Subject – Economy
Context – Asian Paints’ promoters must resign from board: In govern
Concept –
- RPT means transaction between:
- Listed entity and a related party of the listed entity;
- Listed entity and a related party of the subsidiary of the listed entity;
- Subsidiary of the listed entity and a related party of the listed entity;
- Subsidiary of the listed entity and a related party of the subsidiary of the listed entity;
- Related Party Transactions (RPT) are just that — transactions that a company does with parties related to it. An RPT is an arrangement between two entities which share a pre-existing business relationship.
- The Companies Act, 2013has not prohibited RPTs as a whole but instead lays down safety measures that need to be followed while dealing with RPTs.