Section 193 of the Companies Act, 2013
Section 193 of the Companies Act, 2013 – Contract by One Person Company (OPC)
🔹 Applicability:
This section applies only to One Person Companies (OPCs).
✅ Key Provision:
Where a One Person Company enters into a contract with its sole member, who is also the director of the company, the contract must be:
Recorded in the minutes of the Board Meeting, or
If there is no Board meeting, then the company must inform the Registrar of Companies (ROC) about the contract within 15 days of its approval.
❗ Exceptions:
This provision does not apply to contracts entered into by the OPC in the ordinary course of business (e.g., day-to-day transactions).
🧾 Purpose:
To ensure transparency and legal record of related party transactions in OPCs.
Prevents misuse of power when the sole member and director are the same individual.
📌 Example:
If the sole member/director sells equipment to the OPC, it must:
Be entered in the Board minutes, or
Be reported to ROC within 15 days, unless it's a routine business deal.
RELATED Blog
0 comments