Section 193: Contract by One Person Company
This section is for requiring One Person Companies to properly record and report contracts with their sole member who is also a director.
The section, clause by clause
What the section says
In plain terms
(1)Where One Person Company limited by shares or by guarantee enters into a contract with the sole member of the company who is also the director of the company, the company shall, unless the contract is in writing, ensure that the terms of the contract or offer are contained in a memorandum or are recorded in the minutes of the first meeting of the Board of Directors of the company held next after entering into contract:
A One Person Company must ensure that contracts with its sole member, who is also a director, are in writing or recorded in a memorandum or the minutes of the next Board meeting, unless the contract is part of its ordinary business.
provisoProvided that nothing in this sub-section shall apply to contracts entered into by the company in the ordinary course of its business.
(2)The company shall inform the Registrar about every contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors under sub-section (1) within a period of fifteen days of the date of approval by the Board of Directors.
The company must inform the Registrar about these contracts within 15 days of the Board's approval.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 22 of 2019, s. 28, for sub-section (5) (w.e.f. 2-11-2018).
Referred to by
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.