Nominee in One Person Company
Nominee in One Person Company
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 at the powers and responsibilities of a nominee in a One Person Company.
Know more about registering a one person company.
Sole Director & Shareholder
A One Person Company can only have one person as the sole director and shareholder. Rule 3 of the Companies (Incorporation) Rules, 2014 mentions that only a natural person will be qualified to form a one person company. Hence, a company or LLP or any other type of legal entity cannot be a part of a One Person Company.
In addition, the sole Director & Shareholder of the One Person Company must be an Indian Citizen as well as an Indian Resident. The expression “resident in India” refers to a person who has stayed in India for a period of not less than one hundred and eighty-two days during the immediately preceding one calendar year.
The citizenship will be determined as according to the Citizenship Act, 1955. Kindly note that according to Section 9 of the Citizenship Act, 1955 every person who obtains citizenship of any other country will stop to be Indian Citizen. Section 8 is relevant to renunciation of citizenship by means of an Indian citizen. At the time a citizen becomes overseas Citizenship of India under Section 7A of the Act it is recognized that it is not a complete citizenship of India. For that reason, a person having any other passport together with Indian passport will be deemed to be ceased of his Indian Citizenship irrespective of date of Indian passport. This is current legal standing in India even if such other country recognizes dual citizenship.
Can Foreigners or NRIs register a one person company?
Only a person who is an Indian citizen and an Indian resident can become the director & shareholder of a one person company. NRIs and Foreign Citizen cannot incorporate a one person company or become a nominee to an one person company.
Nominee to One Person Company
During the incorporation of a one person company, the sole director & shareholder must propose a person as his/her 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 nominee under the Companies Act, 2013 is not based on succession under the personal law.
Becoming a Nominee of One Person Company
The sole director and shareholder while incorporation a one person company must file the written consent of nominee in the prescribed form to the MCA. The nominee must be a major, Indian citizen and Indian resident. A minor cannot beocme a member or nominee of a one person company or be able to acquire shares in another one person company.
A Nominee can withdraw his approval by providing a notice in written Ffrm 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 abandonment of consent by original nominee in addition to Consent for the appointment of new nominee should be filed in Form INC – 3.
The company will, on the receiving of such intimation, 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 acknowledgment of intimation related to the change.
Death of Director – One Person Company
In case the sole member of a one person company stops to be a member due to death or incapacity to enter into a contract; his/her nominee will become a member of the company. The recent member will put forward in fifteen days of becoming 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 t?}he alteration in membership and with the former written consent of the person so listed in Form INC – 3.