Section 189 of CA 2013 : Section 189: Register Of Contracts Or Arrangements In Which Directors Are Interested

CA 2013

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Explanation using Example

Imagine a company called "Tech Innovations Ltd." which is in the business of software development. The company's Board of Directors includes Mr. A, Mrs. B, and Mr. C. Mrs. B also runs a marketing firm, "B-Marketers," which provides services to various tech companies.

One day, Tech Innovations Ltd. decides to outsource its marketing to an external firm and Mrs. B's firm, B-Marketers, is considered for the contract. Since this could potentially be a related party transaction, falling under Section 188 of the Companies Act, it needs to be disclosed and recorded.

As per Section 189(1), Tech Innovations Ltd. must maintain a register of such contracts. The company records the contract details with B-Marketers in the register, including the nature an...

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