Section 208 — Related party transactions
Related law
Professional notes
Related party transactions are governed by the Companies (Related Party Transactions and Maintenance of Related Records) Regulations, 2018 (S.R.O. 1194(I)/2018), which sets board approval procedure, the “arm’s length” test, and a mandatory register (Annexure I) plus a director’s notice-of-interest form (Annexure II). A transaction with an associated company under Section 199 will very often also be a related party transaction under this section – check both.
SECP updates linked to this section
The circulars, S.R.O.s, and notifications that shaped this section over time.
Sets minimum content for a company's related-party-transaction policy, defines the "arm's length" test, prescribes board approval requirements and the information directors must receive before approving a related-party transaction, and requires a permanent register (Annexure I) of contracts/arrangements with related parties or in which directors are interested, plus a standard director's notice-of-interest form (Annexure II). Regulation 7 (the register requirement) took effect from 1 January 2019, later than the rest of the Regulations.