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CS Executive · Company Law and Practice · Accounts and Auditors

Orion Ventures OPC Pvt Ltd, a One Person Company, has a sole director, Mr Rao. Which statement correctly describes its Board's report and the signing of its financial statement under section 134?

For a One Person Company, the Board's report means only a report giving the Board's explanations or comments on every qualification, reservation, adverse remark or disclaimer in the auditor's report. Its financial statement is signed by just one director, as section 134 specifically permits for such companies.

  1. AThe Board's report must contain all the clauses of section 134(3), and the financial statement needs two directors' signatures
  2. BThe Board's report means a report with explanations or comments on every qualification, reservation, adverse remark or disclaimer by the auditor, and the financial statement is signed by one directorCorrect
  3. CNo Board's report is needed, and the financial statement is signed by the company secretary alone
  4. DThe Board's report is needed with the Directors' Responsibility Statement only, and the financial statement is signed by the auditor

Explanation

Section 134(4) says that for a One Person Company the Board's report means a report containing explanations or comments on every auditor qualification, reservation, adverse remark or disclaimer. Section 134(1) allows signing of the financial statement by only one director in the case of an OPC. The option requiring two directors or the full clause list is therefore wrong.

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