Overview
This article provides a detailed, layman-language explanation of Related Party Transactions Under SEBI LODR under the SEBI LODR Regulations and applicable Rules/Regulations. All amendments, notifications, and circulars up to March 2026 are incorporated.
Relevant provisions: Regulation 23.
Legal Framework
Regulation 23 of the SEBI LODR Regulations establishes the framework for related party. The provisions cover: (a) scope and applicability, (b) registration/compliance requirements, (c) rights and obligations of parties, (d) enforcement mechanisms, and (e) penalties for non-compliance.
Who Is Affected?
| Category | Applicable? | Key Requirement |
|---|---|---|
| Individual / Consumer | Yes (where applicable) | Rights protection, complaint mechanism |
| Business / Company / LLP | Yes | Registration, compliance, record-keeping |
| Startup / MSME | Yes | Special provisions and concessions may apply |
| Importer / Exporter | Yes (where applicable) | License, compliance with Indian standards |
| Professional / Service Provider | Yes | Professional standards, liability provisions |
Detailed Explanation with Examples
Example 1: A business owner in Faridabad must understand related party provisions to ensure proper compliance from the start. This includes identifying applicable requirements, obtaining necessary registrations, and meeting ongoing obligations within prescribed timelines.
Example 2: A startup founder needs to navigate related party requirements efficiently. With DPIIT recognition and MSME status, certain relaxations and concessions may be available, but the core compliance framework remains the same.
Example 3: Consider a consumer or employee affected by related party provisions. The law provides specific rights, remedies, and complaint mechanisms. Understanding these helps enforce your rights effectively.