The Companies Act, 2013 introduced several new provisions concerning company governance. One Person Companies (OPCs) were introduced. OPC simply violated the earlier provisions by allowing one member, who is the promoter, to incorporate the company.
In the event that the Promoter dies:
A single member is the sole shareholder of an OPC. A nominee must be nominated when the OPC is incorporated.
- a major
- resident of India.
Nominee for one OPC and member of another. A person cannot serve as a member or nominee of more than one OPC at the same time. If an individual becomes a nominee or a member of more than one OPC, they must withdraw from the other companies within six months so they are only associated with one OPC.
Upon submitting Form INC-3 and the written consent of the nominee, a nominee is designated. The nominee can withdraw the consent at any time by giving prior notice to the OPC and the sole member of the One Person Company.
Nominees are also important when the office of the sole member is vacated due to death or disability. In this case, the nominee becomes the sole member of the OPC. Following the nominee’s election as a member, he/she shall designate another new nominee with the latter’s consent through INC-3 within 15 days.
In the event of a change in membership, the OPC must notify the Registrar within 30 days of the change by filing the notice of cessation and nomination in Form INC-4, along with Form INC-3 and the new nominee’s consent.
The nominee’s role when the promoter dies:
- After the death of the promoter, the nominee takes over the OPC’s duties
- and receives dividends and shares
- Upon the death of the promoter, the OPC’s liabilities are transferred to the nominee.
Standing nominees can be changed if:
1. Changing the nominee by the promoter
2. Withdrawal of consent by nominee
Candidate is changed by the promoter:
Whenever the promoter desires, the nominees may be changed at any time. It is also possible to change a nominee in the event that the promoter passes away or becomes disabled. If the nominee changes, the One Person Company must be informed and the new nominee must provide written consent via Form INC-4. The OPC must file Form INC-4, along with the fee and Form INC-3 with the Registrar within 30 days of receiving such notification.
Candidate withdraws consent:
Nominees may withdraw their consent at any time by notifying both the promoter and One Person Company. Within 15 days of receiving the notice, the promoter must nominate a new nominee. Within 30 days of receiving such a notification, the OPC must file with the Registrar the notice of withdrawal of consent, INC 3 and INC-4.