pvtltd.co

Company Law

Related Party Transaction (RPT) Compliance

Related party transaction compliance under Section 188 — board/shareholder approval, arm's length pricing review, and AOC-2 disclosure in the Directors' Report. SEBI LODR RPT compliance for listed entities. Section 188 Companies Act 2013, Rule 15 Companies (Meetings of Board) Rules, Form AOC-2, arm's length pricing, SEBI LODR Regulation 23.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineRPT Compliance

Related party transaction compliance under Section 188 — board/shareholder approval, arm's length pricing review, and AOC-2 disclosure in the Directors' Report. SEBI LODR RPT compliance for listed entities. Section 188 Companies Act 2013, Rule 15 Companies (Meetings of Board) Rules, Form AOC-2, arm's length pricing, SEBI LODR Regulation 23. We keep the work founder-friendly and evidence-led so the company can move without unnecessary back-and-forth.

What is included
  • • RPT Compliance scope review and action plan
  • • Document checklist and evidence review
  • • Drafting, computation, or filing support
  • • Submission support and acknowledgement tracking
  • • Follow-up on queries, corrections, or notices
  • • Closure notes and next-step reminders
Documents required
  • • Director or partner details
  • • Constitution documents and shareholding data
  • • Registered office proof and NOC
  • • Board or shareholder resolutions, if relevant
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Section 7 of the Companies Act 2013
  • • Section 92 of the Companies Act 2013
  • • Section 137 of the Companies Act 2013
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Scope

Confirm the scope

We map the exact service route to the trigger, form set, and documentary evidence so the work starts on the right footing.

Step 2Docs

Collect the records

We gather the company records, notices, or transaction documents needed for rpt compliance and check them for gaps.

Step 3Draft

Prepare the filing or memo

We draft the computations, filings, or advisory memo so the next person in the chain can review it quickly and confidently.

Step 4Close

Submit and track follow-up

We move the file through submission, keep the acknowledgement trail tidy, and handle any follow-up questions that come back.

AEO summary

RPT Compliance is the CA-led workflow that helps a Private Limited company stay compliant, file the right forms, and keep the record trail clean.

Related Party Transaction (RPT) Compliance workflow

We start by checking the exact trigger, the legal route, and the documents that make rpt compliance executable for a Private Limited company. That keeps the filing or advisory work tied to the actual statutory path instead of a generic checklist.

Once the scope is locked, we prepare the working papers, filings, and follow-up notes so the matter can move without unnecessary back-and-forth. The goal is to make the process understandable for the founder, the finance team, and the reviewer.

  • • Scope mapping for rpt compliance
  • • CA-led document review and drafting
  • • Submission support and acknowledgement tracking

What this protects for the company

For a Private Limited company, the value is not just speed. It is also about keeping the record trail clean enough for banks, investors, regulators, and future diligence work.

A founder-friendly process lowers the chance of avoidable notices, rework, or missed deadlines while keeping the company aligned with the right section, rule, or circular in Company Law.

  • • Cleaner compliance evidence for Company Law
  • • Better preparation for diligence or audit
  • • Less last-minute chasing inside the finance team

Government fees

Fee breakdown

ItemFeeNotes
MCA / registrar filingAs per MCA scheduleThe filing fee depends on the form, capital, and the route taken.
Stamp duty or delay feeAs per state lawState stamp duty and delay fees vary by transaction and jurisdiction.

Timeline

Typical turnaround

Typical timeline usually means a monthly turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

ROC or state fees depend on the filing path, capital, and any stamp duty or delay fee that applies.

Related services

Keep the company moving

Secretarial Audit

Support for Secretarial Audit.

Inter-Corporate Loans

Support for Inter-Corporate Loans.

Transfer Pricing

Support for Transfer Pricing.

FAQ

Frequently asked questions

Which related party transactions need Board approval and which need shareholder approval?
Section 188 of the Companies Act 2013 requires Board approval for related-party transactions, and shareholder approval by ordinary resolution when the Rule 15 thresholds are crossed or the transaction is otherwise material. The related party must not participate in the vote where the law bars voting.
What are the monetary thresholds that trigger ordinary resolution for RPTs?
Rule 15 uses transaction-specific thresholds, and the brief’s shorthand is sale or purchase at ₹1 crore or 10% of net worth, lease at ₹1 lakh per month, and remuneration at ₹2.5 lakh per month. The exact threshold depends on the transaction category in Rule 15.
Does Section 188 apply to transactions with a wholly owned subsidiary?
A wholly owned subsidiary is not a blanket exemption. Section 188 still needs to be checked against the ordinary-course and arm’s-length carve-outs, plus any specific proviso that applies to the group transaction.
What must be disclosed in AOC-2 for related party transactions?
AOC-2 discloses the material contracts or arrangements with related parties, their main terms, and the basis for treating them as ordinary course or arm’s length. It is attached to the Board’s Report under Section 134 and the related disclosure rule.
What is the consequence if a director approves an RPT that violates Section 188?
Section 188(3) makes the transaction voidable at the company’s option and requires indemnification of loss where the director or employee participated in the breach. The company and officers can also face the statutory penalties in Section 188(4).

Canonical reference: https://www.pvtltd.co/services/related-party-transactions

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We can help with the filing, the legal mapping, and the follow-up work that keeps the company compliant after submission.

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