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Under the Companies Act, 2013, the relevant provision regarding related party transactions involving promoters is Section 188. This section lays down rules for transactions where promoters or their relatives have a direct or indirect interest
Section 188(2) specifies that a related party or a director who is a related party cannot vote on such resolutions:
“No member of the company shall vote on such special resolution, to approve any contract or arrangement which may be entered into by the company, if such member is a related party.”
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