An OPC, having a sole member, must have an appointed nominee who would take the onus of running the company in case of the death of the promoter.
The Companies Act, 2013 brought forth several new enactments with the respect to the governing of several types of companies. One of the most ground-breaking provisions it introduced was the concept of the OPC. While the earlier provisions mandated the presence of at least 2 members to form a company, It simply broke those rules, by making it possible for a single member, who is the Promoter of an OPC, to incorporate a company.
Fate of the OPC if the Promoter Dies
Get the fate of the OPC if the Promoter of an OPC pass away! It is true that an has a sole member who acts as the shareholder of the company. But the member has to appoint a nominee mandatory, at the time of incorporation, who is:
- a natural person
- not a minor
- a resident of India.
- an Indian citizen
- It is pertinent to note that while a person is a member of the company, the same person can act as a nominee for another OPC. However, an individual can act neither as a member nor a nominee of more than one at a given time. If an individual becomes a nominee or a member of more than one OPC, then within 6 months, the membership or the nomination as the case may be, must be withdrawn from the companies, such that the person is associated with one OPC only.
- A nominee is designated through Form INC-3 along with the written consent of the person designated as the nominee. The nominee is given the liberty to withdraw the consent at any time, by giving prior notice to the company and the sole member of the One Person Company.
- Further, the nominee plays a vital role, in circumstances wherein the sole member’s office is vacated due to death or disability to enter into any contract. The nominee steps into the shoes of the sole member, and becomes the member of the OPC. Once the nominee becomes the member, within 15 days shall designate another new nominee with the latter’s prior consent through the Form INC-3.
- The OPC, shall within 30 days of the change in membership, shall notify the Registrar of the same, by filing the notice of cessation and nomination in Form INC-4, and Form INC-3 with the written consent of the new nominee.
- Role Played by the Nominee when the Promoter Dies
- The nominee takes up the responsibilities of the company after the death of the promoter
- The nominee takes possession of dividends and shares after the promoter dies
- On the death of the promoter, the liabilities of the company will be entrusted with the nominee.
Change of Nominee
A standing nominee can be changed in the following instances:
- Change of nominee by the promoter
- Withdrawal of consent by the nominee
Change of Nominee by the Promoter
A nominee can be changed by the promoter at any given time due to any reason. A nominee, as pointed out earlier, can also be changed due to the death or disability of the promoter. Once the nominee is changed, the promoter is obligated to notify the OPC regarding the same and has to furnish the written consent of the new nominee thus appointed through Form INC-4. Within 30 days of receiving such notification, the OPC, as part of the company formation process, has to file the notice of change of nominee in Form INC-4 along with the fee and the written consent of the new nominee in Form INC-3 with the Registrar.
Withdrawal of Consent by the Nominee
Thus, you might have know about the fate that the Promoter of an OPC dies. A nominee can withdraw the consent out of one’s own personal will by serving a written notice to the promoter and the OPC notifying the same. Within 15 days of receiving such notice, the promoter has to designate a new nominee. The OPC within 30 days of receiving such notification has to file the notice of withdrawal of consent, the Forms INC 3 and INC-4 with the Registrar. Visit Vakilsearch to get further legal information!
