A listed company proposes to enter into a contract with its related party involving a transaction beyond the limits prescribed under s.188 of the Companies Act 2013. Such a contract requires:

Section 188 of the Companies Act 2013 requires prior approval of the board before a company enters into any contract or arrangement with a related party. The proviso to s.188(1) further provides that a company shall not enter into such a contract or arrangement which is beyond the limits prescribed under the applicable rules except with the prior approval of the company by a special resolution of members. The limits are fixed under Rule 15 of the Companies (Meetings of Board and its Powers) Rules 2014, based on percentages of turnover or net worth. An ordinary resolution, the Registrar, or the Central Government cannot substitute for the special resolution mandated for transactions beyond the prescribed limits.