Related-Party Transactions
Content
Definition
Related-Party Transactions are business deals or arrangements between two parties who are joined by a special relationship, such as family ties or shared corporate control.
Usage and Context
Related-party transactions are business deals between parties that have special relationships, like family members or shared control.
Frequently asked questions
- What are related party transactions in business? Related party transactions are deals made between a company and entities with a close connection, like its executives or major shareholders, which may need extra scrutiny for fairness.
- What is considered a related party transaction? A related party transaction occurs between two entities with a pre-existing relationship, like between a company and its executives or their family members.
- Do related party transactions have to be at arm`s length? Yes, to ensure fairness, related party transactions should be conducted at arm`s length, meaning on normal market terms.
Benefits
Related-party transactions involve business deals between parties with a special relationship, like family ties.
Conclusion
Related-party transactions are deals made between parties with close relationships, like family members.
