What Happens to an OPC if a Promoter Dies?

The One Person Company is as easy as it looks actually it is not. In the domain blog, it is going to be discussed what happens if an OPC promoter dies. So, let’s read the blog attentively to be aware of what happens if an OPC promoter dies.

Get A Brief on OPC 

The Companies Act 2013 has created revolutions in the One Person Company segment. The Companies Act 2013, Section 2, Subsection 62 defines that the company has only one shareholder as a member. 

The OPC has encouraged small traders and entrepreneurs to legally register their company.    

Look How OPC is Founded

The person who is willing to establish an OPC first has to register the name with MoA (Memorandum of Associations). The MoA is important for one factor as it declares the name of a nominee in case of the death of the OPC promoter. The nominee then will work as a sole member of the One Person Company after the death of the promoter.

The Role of Nominee in an OPC 

At the time of One Person Company Registration, the OPC promoter has to register a name as ‘Nominee’ who would control the helm of the company if the promoter passes away suddenly. 

The responsibilities the nominee will face:

1. The nominee has to bear all the responsibilities after the death of the promoter.
2. All the dividends, rights, shares will be at the hand of the nominee after the promoter’s death.
3. The nominee has to take all the liability-related responsibility of the One Person Company.

These are the responsibilities a nominee has to face in case the promoter dies suddenly.

Criteria Related to Nominee Selection

For being a nominee, a person has to follow a few criteria.

1. The person has to be a citizen of India.
2. The name and address of the nominee are required.
3.  A consent letter of the nominee is another requirement.
4. The INC-3 Form is also required to be filled up with the registrar.
5. A person can be the nominee of a particular OPC at any given time.
6. If the person takes the charge of more than one OPC then he/she will be responsible to resign from one OPC.

Along with the rules of the OPC registration process, the criteria related to the nominee also have to be remembered. 

Rules Related to Nominee Withdrawal

The Companies Act 2013 has also kept provision for nominee withdrawal. A nominee can withdraw from his/her position from the OPC if the person thinks about it. The rule says a new nominee has to be appointed after 15 days of previous nominee withdrawal.

Rules Related to Nominee Replacement 

The Form INC- 4 will turn out to be an important factor if the OPC promoter thinks about changing the nominee with a new one. The Form INC- 3 will be considered as NOC (No Objection Certificate) that is obtained from the would-be nominee. 

Documents Required for OPC Incorporation and Nominee Selection

To register an OPC, you need certain documents.

• Copy of PAN Card, Aadhaar Card
• Photograph
• Address Proof
• No Objection Certificate 
• Rent Agreement (if required)

These are the necessary documents if you are interested in what is the OPC Registration process.

How about Taking Support from Online Legal India™?

From handling ‘nominee-related issues’ to One Person Company registration, Online Legal India™ can support you at every point. Even as a promoter of One Person Company, you can expect help from the CA or CS on topics like how to file income tax returns. 

So, for any problem that is associated with One Person Company, you can consult with the CA, CS, and CMA of Online Legal India™. At a minimum fee, you can get what you want.

Conclusion

The One Person Company, literally, is a game-changer in the business arena. Never before, the small traders and entrepreneurs have ever thought about registering their business legally and formally.

Now, with One Person Company consisting of minimal legal compliances, the small businesspersons can also make their dream true.