How to Change the Nominee in OPC?
Changing the nominee in an OPC (One Person Company) refers to the process of replacing the individual who is nominated to take over the company in case the member of OPC becomes unable to succeed the business, (due to incapacitation, death, or any other reason).
As per the Companies Act, 2013 in an OPC, there are legal requirements of law to appoint nominee. The nominee’s role is to ensure that continuity of the business if the member is unable to run business.
Changing the nominee involves a formal procedure, including meeting of director (not necessary if OPC has only director), obtaining consent from the new nominee, passing resolutions, and filing necessary forms with the ROC. The process ensures that the company’s records are updated and compliant with legal regulations.
Requirement of Nominee
According to the provisions of Companies Act, 2013, it is mandatory for the sole member of an OPC to nominate a person as a nominee during the incorporation of the OPC. This requirement is outlined in Section 3(1)(c) of the Companies Act, 2013, and Rule 4(1)(b) of the Companies (Incorporation) Rules, 2014.
The nominee is a person who will take over the management and ownership of the OPC in case the member of OPC becomes incapacitated or dies. The nominee’s name and consent are provided by the sole member during the incorporation process of the OPC.
It’s important to note that the nominee’s consent is also necessary. The nominee shall be an individual who is a natural person and an Indian citizen. The nominee not necessary to be a family member, he can be any trusted person who is willing to take up this responsibility.
The purpose of having a nominee is to ensure the continuity of the OPC in case something happens to the sole member.
Who cannot appoint Nominee of OPC
- Person or individual who is minor (as per companies rule,2013 minor cannot hold beneficial interest)
- Person who is Foreign citizen
- Person who is incapacitated
- Person who is not natural person
Circumstances under which a Nominee can change
In an OPC, the nominee is a crucial aspect of the company’s structure, designated to take over the company in case the sole member (owner) becomes unable to manage the business due to various reasons.
- Resignation or Death of the Existing Nominee member must appoint a new nominee to ensure the continuity of the business.
- Nominee himself withdraw his consent
- If there is a conflict, disagreement, or legal dispute between the sole member and the existing nominee.
- In case there is a significant change in the business circumstances, such as a change in ownership structure, business expansion, or diversification, the sole member might consider changing the nominee to align with the new business requirements.
- In case existing nominee becomes legally incapacitated and is unable to fulfill the duties in that position.
- Nominee becomes ineligible due to legal reasons.
Nominees withdrawn his consent
- Nominee of OPC withdraw his consent by giving notice in writing to member
- Member nominate another person as nominee within 15 days of receiving notice of withdrawal.
- Member send intimate of nomination to OPC as well as person nominated in writing (Form- INC3)
- Within 30 days from receiving notice of withdrawal of consent OPC file to registrar copy of such notice and intimation of nominated person as nominee to ROC in form INC-4.
Change of Nominee by Member
- Member may at any time change nominee by giving intimation in writing.
- Member need to take approval of new nominee in Form INC-3
- Within 30 days from receipt of intimation OPC file to registrar copy of such notice and intimation of nominated person as nominee to ROC in form INC-4.
Death or Incapacity of member
- In case of death of member nominee become only member of OPC
- Nominee needs to nominate new nominee within period of 15 days.
Benefits of Having a Nominee in OPC
Having a nominee in a OPC offers several benefits, primarily centered around ensuring the continuity and stability of the business. Here are the key advantages of having a nominee in an OPC:
- Primary purpose of a nominee in an OPC is to ensure business continuity.
- It ensures that the OPC complies with regulatory standards and avoids legal complications and penalties.
- A nominee protects the interests of stakeholders, including employees, clients, and creditors. It provides a clear mechanism for continuation of operations of company.
- A designated nominee ensures a structured and smooth transition, and also reducing uncertainties.
- Nominee protects the company’s assets as custodians, ensuring that the company’s resources are used responsibly and in the best interest of the stakeholders.
- Nominee acts as Legal Representation of company. In legal proceedings or contractual matters, the nominee can represent the company’s interests (OPC), ensuring that the company is legally protected even in the absence of the member.
Company Suggestion provides services of Compliances services along with same Income Tax Returns, GST Registration or Returns etc.
Our experts of team will guide you related to compliances of Companies, Firms and other entities if you have any doubt regarding this, then you can send your doubts on company suggestion and clear it.
