April 11, 2022
Summary of the circular and notification issued by SEBI and MCA on 08/04/2022
Clarification on validity of omnibus approvals for material related party transactions(RPTs) under LODR Regulations
As per LODR regulations, omnibus approval for RPTs granted by the audit committee shall be valid for a period not exceeding one year and shall require fresh approvals after expiry of one year. In case of material RPTs, shareholders’ approval is also required.
To align the process to conduct AGMs and obtain omnibus shareholders’ approval for material RPTs, SEBI has now clarified that the shareholders’ approval of such omnibus and material RPTs approved in an AGM shall be valid upto the date of the next AGM for a period not exceeding fifteen months. Where they are obtained from shareholders in general meetings other than AGMs, the validity of such omnibus approvals shall not exceed one year.
Nidhi Companies to submit the declaration issued by the Central Government before commencement of business
MCA now requires a Nidhi Company to obtain and submit declaration from the Central Government under Section 406 of the Companies Act, 2013 along with the declaration of commencement of business in Form INC 20A.
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