Chapter XII - Meetings of Board and Its Powers
Section 193
Section 193: contract by One Person Company
Section 193 applies when a One Person Company limited by shares or guarantee contracts with its sole member who is also its director. Unless the contract is in writing, its terms must be set out in a memorandum or recorded in the minutes of the next board meeting, and the Registrar must be informed.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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: Provided 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.
Introduction
Contracts entered into in the ordinary course of business are excluded. The company must inform the Registrar of every contract recorded in board minutes under sub-section (1) within fifteen days of the date of approval by the Board.
Section 193 commenced on 1 April 2014 under S.O. 902(E). The India Code consolidated text shows no amendment, and its text matches the 2013 Gazette.
Key takeaways
Sole member who is a director
Covers contracts between the OPC and its sole member who is also its director.
Writing or record
If not in writing, terms go in a memorandum or the minutes of the first board meeting held after the contract.
Ordinary course excluded
The proviso excludes contracts in the ordinary course of business.
Fifteen days to inform the Registrar
Contracts recorded in board minutes must be reported within fifteen days of Board approval.
Recording the contract
Under sub-section (1), where a One Person Company limited by shares or by guarantee enters into a contract with its sole member who is also its director, the company must, 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 held next after entering into the contract.
The proviso excludes contracts entered into by the company in the ordinary course of its business.
Informing the Registrar
Under sub-section (2), the company must inform the Registrar about every contract entered into and recorded in the minutes of the Board under sub-section (1) within fifteen days of the date of approval by the Board.
Why it matters
In an OPC the same person sits on both sides of the contract. The section creates a written trail that protects creditors and any future members, and allows the Registrar to see such dealings.
Practical preparation
List all dealings between the OPC and its member-director (loans, leases, service arrangements, asset sales); decide whether each is in the ordinary course of business; reduce non-ordinary contracts to writing or record them in the next board minutes; inform the Registrar within fifteen days of Board approval for those recorded in minutes.
Practical checklist
Do
- Prefer a written contract signed for the company and by the member in his or her personal capacity.
- Diarise the fifteen-day reporting window from the date of Board approval.
Avoid
- Do not leave non-ordinary dealings with the member-director unrecorded.
Illustrative example
Hypothetical: OPC leases premises from its member
An OPC agrees orally to lease office space owned by its sole member-director.
Record
The lease terms are recorded in the minutes of the next board meeting.
Approve
The Board approves the arrangement at that meeting.
Inform
The company informs the Registrar within fifteen days of the Board approval.
Outcome
- A signed written lease would equally satisfy the recording requirement in sub-section (1).
Glossary
- Sole member
- The only member of a One Person Company.
- Ordinary course of business
- Transactions of a kind the company routinely enters into in carrying on its business.
Frequently asked questions
Does section 193 apply to every OPC contract?
No. Only contracts with the sole member who is also a director, and not those in the ordinary course of business.
What must be reported to the Registrar?
Every contract entered into and recorded in board minutes under sub-section (1), within fifteen days of the date of approval by the Board.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026