CA Inter P2 · Chapter 1 · Question 9 of 9
Mr. Arjun is a director of Sunrise Ltd. Which of the following is a 'related party' of Sunrise Ltd under section 2(76)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A private company in which Mr. Arjun's brother is a member
Explanation
Section 2(76) includes a private company in which a director or manager, or his relative, is a member or director. A brother is a relative under section 2(77) and the related rules. A public company is related only if the director or manager is a director of it AND holds, with relatives, more than 2% of its paid-up capital. A cousin is not a relative under the Act.
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