List of explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Three short rules do a lot of work in everyday compliance. Rule 2A names the classes of companies that are not treated as "listed" even though some of their debt or shares sit on an exchange. Rule 3 makes certain holding-company people related parties of a subsidiary. Rule 4 lists exactly who counts as a "relative".
This article is as amended up to G.S.R. 880(E) dated 1 December 2025 per the MCA e-book (the amendments to these three rules are the 2014 and 2021 ones named below). Later amendments should be checked on the official text. If you need a related party map built for your group, see our compliance advisory service.
Rule 2A (in force from 1 April 2021) says three classes of companies are not "listed companies" for the proviso to section 2(52). Rule 3 deems a director other than an independent director, or a key managerial personnel, of the holding company, or his relative, to be a related party of the subsidiary. Rule 4 lists eight relationships, with step-relations included for father, mother, son, brother and sister.
Rule 2A: companies not to be considered as listed
Rule 2A was inserted by the Second Amendment Rules, 2021 with effect from 1 April 2021. It applies "for the purpose of the proviso to clause (52) of section 2 of the Act". The proviso to the Act's definition of a listed company is where these exclusions land; see our section 2 definitions guide, part 2.
| Clause | Class of company that is not a listed company | Condition printed in the rule |
|---|---|---|
| 2A(a) | Public companies | Equity shares not listed on a recognised stock exchange, but they have listed (i) non-convertible debt securities issued on private placement basis under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008, or (ii) non-convertible redeemable preference shares issued on private placement basis under the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 |
| 2A(b) | Private companies | Listed their non-convertible debt securities on private placement basis on a recognised stock exchange under the 2008 Debt Securities Regulations |
| 2A(c) | Public companies | Equity shares not listed on a recognised stock exchange, but listed on a stock exchange in a jurisdiction specified in sub-section (3) of section 23 of the Act |
The rule quotes SEBI regulations of 2008 and 2013 as printed. Check the current regulations before relying on it. For clause (c), see our article on the 2024 rules for listing equity shares in permissible jurisdictions.
Practical effect: a closely held public company that has only raised non-convertible debentures through private placement and listed them does not become a "listed company" under the Act for that reason alone. The same is true of a private company with only listed debt. Which provisions then apply is a matter for the sections that use the "listed company" label.
Rule 3: related party and the holding company's people
For sub-clause (ix) of clause (76) of section 2, a director or key managerial personnel of the holding company, or his relative, "with reference to a company", is deemed to be a related party. The words "other than an independent director" were inserted by the amendment of 17 July 2014. So the rule reads: a director (not being an independent director) or KMP of the holding company, or that person's relative, is a related party of the subsidiary.
Example: Kavita Rao is a non-independent director of Northgate Holdings Limited, which holds Brightleaf Foods Private Limited. For Brightleaf, Kavita is a deemed related party under rule 3. Her brother is also one, because the rule extends to the relative. If instead she were an independent director of Northgate, rule 3 would not make her a related party of Brightleaf.
Which transactions need approval once someone is a related party is for the Act. See our section 188 guide on related party transactions.
Rule 4: list of relatives
Rule 4 says a person is deemed to be the relative of another if he or she is related to the other in the following manner:
| Serial number | Relative | Proviso printed in the rule |
|---|---|---|
| (1) | Father | Includes step-father |
| (2) | Mother | Includes step-mother |
| (3) | Son | Includes step-son |
| (4) | Son's wife | None |
| (5) | Daughter | None |
| (6) | Daughter's husband | None |
| (7) | Brother | Includes step-brother |
| (8) | Sister | Includes step-sister |
The list is read from the person whose relatives are being counted: a person's son's wife is that person's relative, and a person's daughter's husband is too.
The list is closed. Some familial relationships that look close are absent: a spouse, a grandparent, a grandchild, a cousin, an uncle or aunt. The rule text printed in the e-book does not list them, and this article does not add them from outside the text. If you suspect that another definition (in the Act itself) reaches a spouse or other relation, check the Act directly.
Who is affected
- Listed-status questions: promoters and CFOs of public and private companies with listed debt need rule 2A to see whether they sit inside or outside the "listed" label.
- Related party identification: company secretaries preparing a related party register need rules 3 and 4 together: first who is connected to the holding company, then who is a relative of that person.
- Directors and KMP: a director who is not independent in a holding company should know that the subsidiary will treat him and his relatives as related parties.
Need help with related party and listed-status checks?
If a company has listed debt, a holding company with several subsidiaries, or a long list of connected persons, a clean related party map saves trouble at every audit and filing. TaxClue's compliance advisory team can build one with you from the Act and these rules.
Key takeaways
- Rule 2A applies from 1 April 2021 and names three classes of companies that are not treated as listed.
- Rule 3 makes holding-company directors (other than independent directors), their KMP and their relatives related parties of the subsidiary.
- Rule 4 lists eight relatives; step-relations are included for father, mother, son, brother and sister.
- The list in rule 4 is closed; this article does not add relations the text omits.
- Old SEBI regulations are quoted as printed in rule 2A; check the current regulations.
Read next
- Rules 1 and 2: digital signature, DIN, electronic mode and the small company limits
- Section 188 of the Companies Act, 2013: related party transactions
- Section 2 of the Companies Act, 2013: definitions, part 2
- Rules 1 to 5 of the Listing in Permissible Jurisdictions Rules, 2024
Disclaimer: Based on the Companies Act, 2013 rules named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.