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.