How is the nominee of a one person company changed?
The member of a one person company changes the nominee by a written intimation, with the new person’s consent in Form INC-3. The company files that change with the Registrar in Form INC-4 within 30 days. The new nominee does not become the member unless the member dies or is incapacitated.
Who can be the nominee?
Section 3 requires the memorandum of a one person company to name another person who becomes the member if the subscriber dies or is incapacitated. That person is a natural person and an Indian citizen. A minor cannot be the member or the nominee. A person cannot be the nominee of more than one OPC, and cannot be a member of more than one OPC.
The nominee need not be a relative. Consent is given before the name is entered. While the member is alive and able to act, the nominee does not own the shares, does not hold the company’s assets, and does not conduct the company’s cases.
How does the member change the nominee?
The member may change the nominee at any time by a written intimation to the company. The new nominee consents in Form INC-3. Within 30 days of receiving the intimation, the company files Form INC-4 with the Registrar, with that consent. A disagreement, or a wish to widen the business, is only a reason the member might decide to change the name. It is not a separate procedure.
What if the nominee withdraws?
The nominee withdraws by a written notice to the member. The member names another person within 15 days of that notice and sends the intimation, with the new consent in Form INC-3, to the company. The company files Form INC-4 within 30 days of the withdrawal notice, with the new consent.
What happens if the member dies?
On the member’s death or incapacity, the nominee becomes the member. That new member nominates a fresh nominee within 15 days. The company files the notice of the change with the Registrar in Form INC-4, with the new consent. Becoming the member is not, by itself, an appointment as director. A director is appointed by the form used for an appointment.
Frequently asked questions
Four questions cover ownership, a board meeting, who may be named, and the 30 days.
Does the nominee own the company while the member is alive?
No. The nominee has consented to become the member if the member dies or is incapacitated. Until then the nominee is not the owner and is not the company’s representative.
Is a board meeting required to change the nominee?
No. The member makes the nomination. An OPC with one director does not hold a board meeting for this change.
Can a minor or a foreign citizen be the nominee?
No. The nominee is a natural person who is an Indian citizen. A minor cannot be the nominee. One person cannot be the nominee of more than one OPC.
How many days does the company have to file?
Thirty days from the member’s intimation of the new nominee, or from the notice that the existing nominee has withdrawn consent. The filing is Form INC-4, with the new consent in Form INC-3.
Sources
Section 3 of the Companies Act, 2013 requires a nominee. The consent is Form INC-3. The company’s notice of a change is Form INC-4.