Related-Party Transaction

Related-Party Transaction

A transaction between two businesses that have a personal or other relationship. For example, a publicly-traded company may be inclined to hire a large, minority shareholder as a supplier. In small businesses, a company may hire the owner's brother-in-law to repair the driveway. Related-party transactions are legal, but create the potential for conflicts of interest. Thus, publicly-traded companies are required to report them on their 10-K forms.
References in periodicals archive ?
Seventy-nine percent of fraud-accused companies disclosed a related-party transaction in the proxy statement filed during the first fraud period, compared with 71% of no-fraud companies studied during the comparable period.
Leases of property to LLCs and other transactions in which a member retains ownership--such as a member's pledge of separately owned assets to obtain or secure LLC debt--are regarded as transactions between an LLC and a nonmember (subject, of course, to related-party transaction considerations); see Regs.
For example, if the chief executive officer awards a contract to a company owned by her husband, it is a related-party transaction.
The Company also announced that based on the undisclosed related-party transaction, its prior financial statements should not be relied upon.
taxpayer who imports property into the United States in a related-party transaction cannot claim, for purposes of computing the property's basis or inventory cost, a cost greater than the amount declared to U.
6038C(b)(2) broadens these requirements to include such other information, as required by regulations, that pertains to any item not directly connected with a related-party transaction.
The Transaction was a related-party transaction which proceeded in compliance with the requirements of Ontario Securities Commission Rule 61-501 and with the approval of the TSX Venture Exchange.
Affiliates of the Evangelical Council for Financial Accountability (ECFA) have one year to comply with a new standard for setting compensation and addressing related-party transactions.
htm, provides auditors and accountants with guidance on the timely subject of related parties and related-party transactions.
A transaction is considered to be compliant with the arm's length principle when conditions imposed and prices paid in related-party transactions are comparable to those imposed and paid by independent enterprises in comparable circumstances.
Most of the exports have been related-party transactions by multinational corporations, like Goodyear and Michelin.
To allay taxpayer concerns relating to the treatment of related-party transactions in prior open taxation years, we recommend that Revenue Canada's policy on the retroactive application of the APA methodology be set forth as part of the Introduction, as well as in several of the detailed provisions (discussed below).