Full formBusiness & Corporate
RPTstands forRelated Party Transaction
Full Form of RPT
What is RPT?
Related Party Transaction, commonly abbreviated as RPT, refers to a business deal or arrangement between two parties who share a pre-existing business relationship. In India, RPTs are governed by Section 188 of the Companies Act 2013 and are also regulated under SEBI's Listing Obligations and Disclosure Requirements (LODR) for listed companies. These transactions typically involve promoters, directors, key managerial personnel, or their relatives, along with the company itself. The primary purpose of regulating RPTs is to prevent conflicts of interest, ensure transparency, and protect minority shareholders from potential misuse of company resources. Companies are required to disclose all material RPTs in their annual reports, board meeting minutes, and financial statements, and in many cases, shareholder approval is mandatory before executing such transactions. RPTs are audited closely under Ind AS 24 and are frequently examined in professional courses like CA, CS, and CMA. Independent directors play a key role in reviewing and approving these transactions to maintain corporate governance standards. With increasing regulatory scrutiny from SEBI and the Ministry of Corporate Affairs, understanding RPTs has become essential for finance professionals, auditors, and corporate law practitioners across India.
RPT का फुल फॉर्म
संबंधित पक्ष लेनदेन
Example
The board of directors approved the Related Party Transaction with the promoter-owned firm only after obtaining shareholder approval, as mandated under Section 188 of the Companies Act, 2013.
RPT — frequently asked questions
What is the full form of RPT?
RPT stands for Related Party Transaction, which refers to a deal or arrangement between a company and its related parties such as directors, promoters, or their relatives.
Why are Related Party Transactions regulated in India?
RPTs are regulated to prevent conflicts of interest, ensure transparency, and protect minority shareholders from potential misuse of company resources by insiders.
Under which law are RPTs governed in India?
RPTs in India are primarily governed by Section 188 of the Companies Act 2013 and SEBI's LODR regulations for listed entities, along with Ind AS 24 for disclosure.