Shivam G. 08 June 2026
In a Related Party Transaction involving a Leave and Lincese Agreement, a director is giving his/her personally onwed commercial property on licnese to the Company.
Can the same director, being an authorised signatory of the Company, also execute/sign the Leave and Licese Agreement on behalf of the Company (licensee), thereby signing the agreement in both capacieties?
Are there any legal restrictions, governance concerns, or best practices under the Companies Act, 2013 in this regard?
Dr. J C Vashista (Advocate ) 10 June 2026
The company is a separate legal entity where the director is functioning in his/her fiduciary duty, accordingly s/he is authorised representative of the comppany. On the other hand the s/he (director) is owner/AR of the property executing L& L in favour of the company.
Accordingly there is no legal infirmity when same person is executing leave & licence agreement for the company and accepting the property as AR/Director.
However, it would be more appropriate /better if someone else steps in the shoes of either of the party to the L & L. in order to avoid any confusion at a later stage.
T. Kalaiselvan, Advocate (Advocate) 13 June 2026
There is no legal infirmity in the owner signing the L&L agreement as well as on behalf of the company in the capacity of director of the company.
Until and unless there is no dispute in this regard by the other partners/directors, this arrangement will go on smoothly.
P. Venu (Advocate) 17 June 2026
What are the facts? What is the context?
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