A related party transaction occurs when a company enters into a transaction with individuals or other companies that are connected in some way with it or its management.

Question

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This statement is true. A related party transaction involves dealings between a company and entities or individuals who have a close relationship with the company, such as its directors, shareholders, or subsidiaries. Such transactions require special disclosure and monitoring to avoid conflicts of interest and ensure fair prices and terms.

A Related Party Transaction Occurs When a Company Enters into a Transaction