Procedure for Recording and Reporting Contracts by One Person Company (OPC)

Ronak Sharma

Ronak Sharma

Published on: Jul 11, 2025

Priya Gandhi

Updated on: Jul 11, 2025

★★★★★(2 Ratings)

21

Introduction

In a One Person Company (OPC), where the sole member is also the director, certain contracts must be properly documented to ensure transparency and legal compliance. The Companies Act, 2013 requires that such contracts, if not in the ordinary course of business, be recorded and reported to maintain proper corporate governance. This procedure outlines the steps for recording and informing the Registrar of Companies (ROC) about these contracts.

Applicable Provisions:

1. Section 193 of the Companies Act, 2013
2. Rule 12 of Companies (The Registration Offices and Fees) Rules, 2014

Mandatory Requirements:

Record the contract in the minutes of the first Board meeting held after entering into the contract, which is not in writing and not in the ordinary course of business.

Procedure:

1. If Contract is in Writing:
   If the contract is in written form, then OPC can execute it like any normal company and its director or authorized person, signs it.
2. If Contract is not in Writing (i.e., Oral Agreement):
   If the OPC limited by shares or by guarantee enters into contract which is not in writing, with the sole member of the company who is also the director, then Section 193(1) applies.

1. Recording of Contracts:
   OPC must ensure that the terms of the contract or offer are either:
   • Contained in a memorandum, or
   • Recorded in the minutes of the first Board meeting held after entering into the contract.
2. Convene Meeting of Board of Directors for Ratification of Contract Entered:
   
   • Issue Notice of Board Meeting to the Directors of Company, at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
   • Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
   • Hold a meeting of Board of Directors of the Company to ratify the contract entered into by such OPC.
   • Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to the Directors for their comments.
   • Refer the Procedure for Preparation, Signing and Compilation of Minutes of Board Meeting
3. Intimation to Registrar of Companies
   OPC shall inform the Registrar of Companies about every contract executed, in Form GNL-2, within a period of fifteen days of date of approval from the Board of Directors.

Note: If the contract entered by the company is during the ordinary course of business, then this procedure does not apply.

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