Contracts by One Person Company (Section 193 of the Companies Act, 2013) :

Section 193 of the Companies Act, 2013 came into force from 1st April, 2014 which provides for Contracts by One Person Company. According to this section:

(i) 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 t he 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. However, if contracts are entered into by the company in the ordinary course of its business then such ensurance shall not be necessary.

(ii) The company shall inform the Registrar about every such contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors within a period of 15 days of the date of approval by the Board of Directors.