One person company is a type of
company introduced by the Companies Act, 2013 that has one person as a
shareholder and director. One person company is similar to a private limited
company, and the name of a one-person company always ends with the terms “(Business
Name (OPC) Private Limited). In this article, we look at the powers and
responsibilities of a nominee in a One Person Company.
During the incorporation of a one-person company, the sole director & shareholder must propose a person as their nominee. The sole promoter must obtain the nominees written consent to act as a nominee. In case of death or incapacitation, the nominee would automatically become the sole promoter of the one-person company. Hence, the provision for a nominee under the Companies Act, 2013 is not based on succession under the personal law.
Becoming a Nominee of One Person Company
While incorporating a one-person company, the sole director and shareholder must file the written consent of the nominee in the prescribed form to the MCA. The nominee must be a significant Indian citizen and Indian resident. A minor cannot become a member or nominee of a one-person company or acquire shares in another one-person company.
A Nominee can withdraw his approval by providing notice in written form to the single member in addition to the One Person Company. The Sole member will propose another nominee in fifteen days. The notice related to the abandonment of consent by the original nominee in addition to Consent for the appointment of a new nominee should be filed in Form INC – 3.
On receiving such intimation, the company will file with the Registrar a notice of such change in Form INC – 4 with the paper-based consent of the fresh nominee in Form INC – 3 in thirty days of acknowledgement intimation related to the change.
Suppose the sole member of a one-person company stops being a member due to death or incapacity to enter into a contract. In that case, their nominee will become a member of the company. The recent member will put forward in fifteen days of becoming a member, a person the same as his nominee. The company will file with the Registrar an indication of such cessation and nomination in Form INC – 4 in thirty days of the alteration in membership and with the former written consent of the person so listed in Form INC – 3.
Created & Posted by Pooja
Income Tax Expert at TAXAJ
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