A company proposes a RELATED PARTY TRANSACTION with a director and his relative exceeding the prescribed threshold. Under Section 188 of the Companies Act, 2013, such a transaction requires:

Section 188 of the Companies Act, 2013 requires that contracts or arrangements with a related party must, as specified, be approved by the Audit Committee and the Board of Directors, and where the transaction exceeds the prescribed limits, by the MEMBERS through a SPECIAL RESOLUTION passed at a general meeting. The restrictions safeguard the company against self-serving transactions. Section 190 and Rule 15 of the Companies (Meetings of Board and its Powers) Rules operationalise details and thresholds. Related-party transactions are a focal point of corporate-governance scrutiny, including under the SEBI LODR regime for listed companies.