Agreement/Contract with Related parties!! just approval required

Resolution Limit under Related Party Transactions

Related Party Transactions

Provisions regarding Related Party Transactions are provided under section 188 of the Companies Act, 2013 read with rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 which provides that a company cannot enter into any contract or arrangement with a related party except with the prior approval of Board or Shareholders as the  case may be with respect to following transactions : 

Resolution for the transaction

No Resolution RequiredBoard ResolutionOrdinary Resolution
Non-Applicability of RPT. Transaction entered in ordinary course of business at Arm Length Price (fair price)If it is within the limit. Interested Person cannot voteIf it exceeds the limit of the transaction
Related Party Transactions u/s 188 which requires prior approval of the Board of Directors (Board Resolution)Limits of Transactions exceeding which  approval from the shareholders is required (Special Resolution)
Sale, purchase, or supply of any goods or material, directly or through the appointment of any agent10% or more of the turnover of the Company
Selling or otherwise disposing of or buying property of any kind, directly or through the appointment of agent10% or more of the Net Worth of the Company 
Leasing of property of any kind10% or more of the turnover   of the Company
Availing or rendering of any services, directly or through the appointment of agent10% or more of the turnover of the Company 
Such related party’s appointment  to any office or place of profit in the Company, its subsidiary or associate  Company at a monthly remuneration exceeding Rs. 2,50,000/-
Underwriting the subscription of any securities or derivatives thereof, of the company1% of the net worth of the Company 

Note: Arm Length Basis means a transaction between 2 related parties that is conducted as if they were unrelated, so that there is no conflict of interest.