My One Person Company's nominee died or withdrew: what do I file and by when?
Nominee of your One Person Company died or backed out? The 15-day and 30-day clocks, Form INC-4, who can be the new nominee, and what not to do.
CA Harun Raaj
makeitlegit.in
You set up a One Person Company (OPC). When you did, you named one person, the nominee, who steps in as the member if you die or cannot manage your own affairs. Now that nominee has died, or has told you in writing that they no longer want the role.
This is fixable. But two short clocks start running, and the company is the one that must file. This article walks you through both clocks and the form, as the rules read today.
First, why the nominee exists
An OPC is a company with only one member (s.2(62), Companies Act 2013). A company needs a member for its life. So the law makes you name a second person in the memorandum, with that person's prior written consent. That person becomes the member if you die or are unable to enter into contracts (the first proviso to s.3(1)(c), Companies Act 2013).
The same section says the nominee may withdraw consent in the prescribed way, and that you, the member, may change the nominee at any time by notice (second and third provisos to s.3(1), Companies Act 2013). It also makes it your duty to tell the company about any change, and the company's duty to tell the Registrar of Companies (ROC), within the time and in the manner prescribed (fourth proviso to s.3(1), Companies Act 2013).
The "prescribed" part sits in rule 4 of the Companies (Incorporation) Rules, 2014. That rule is what you follow.
Which of your two situations are you in?
The rule treats these as two separate cases. The clock and the trigger differ, so identify yours first.
Case A: the nominee withdrew. The nominee gave written notice to you and to the company, withdrawing consent (rule 4(3), Companies (Incorporation) Rules, 2014).
Case B: the nominee died, or became unable to contract. Here you are the sole member and still alive. The rule lets you change the nominee "at any time for any reason including in case of death or incapacity to contract of nominee" (rule 4(5), Companies (Incorporation) Rules, 2014).
A third case is different: you, the member, have died and the nominee has become the member. That is covered at the end of the article, because it triggers its own filing.
What you can still do today
Everything is fixable if you act inside the time limits. Your options are simple.
- Pick a new nominee who is eligible (see below).
- Get that person's consent in writing, before you name them.
- Tell the company in writing.
- Make sure the company files the notice with the ROC.
You can also do a voluntary change in the same way, without any trigger. The rule lets you change the nominee "at any time for any reason" (rule 4(5), Companies (Incorporation) Rules, 2014). So if your nominee is simply no longer the right person, you do not have to wait for a death or a withdrawal.
Who can be the new nominee
Check this before you approach anyone.
- The nominee must be a natural person who is an Indian citizen. Since 1 April 2021 the rule says "whether resident in India or otherwise", so an Indian citizen living abroad can be a nominee (rule 3(1), Companies (Incorporation) Rules, 2014, as amended by G.S.R. 91(E) dated 1 February 2021, in force 1 April 2021).
- No person can be a nominee in more than one OPC (rule 3(2), Companies (Incorporation) Rules, 2014).
- No minor can be a member or nominee of an OPC (rule 3(4), Companies (Incorporation) Rules, 2014).
- The nominee must give prior written consent (rule 4(1) and rule 4(5), Companies (Incorporation) Rules, 2014).
Ask the person two plain questions. Are you already a nominee in another OPC? Are you an Indian citizen over 18? If the answer to the first is yes, or the second is no, they cannot be your nominee.
A related rule: if a person is a member of one OPC and becomes a member of another because they were its nominee, they must meet the one-OPC limit within 180 days (rule 3(3), Companies (Incorporation) Rules, 2014).
The deadline clock
There are two clocks. Read each one against the date written on the notice you received.
Case A, the nominee withdrew.
- You must name another person within 15 days of receiving the notice of withdrawal. You send the company written intimation of the new nomination, along with the new person's consent (proviso to rule 4(3), Companies (Incorporation) Rules, 2014).
- The company must file the notice of withdrawal and the new nominee's name with the Registrar within 30 days of receiving the notice of withdrawal (rule 4(4), Companies (Incorporation) Rules, 2014).
Case B, the nominee died or lost capacity, or you simply change the nominee.
- You give the company written intimation naming the new person and get that person's prior consent (rule 4(5), Companies (Incorporation) Rules, 2014).
- The company then files the notice of change with the Registrar within 30 days of receiving your intimation (proviso to rule 4(5), Companies (Incorporation) Rules, 2014).
So in Case A the 15-day clock is yours, and the 30-day clock is the company's. Since you are the sole member and usually the sole or one of the directors, in practice both are on you. The 15-day period runs from receipt of the notice of withdrawal. The 30-day period runs from the company's receipt of the notice or of your intimation. If you are close to a limit, ask your CA to confirm how the days run on your facts.
Step by step
Step 1. Fix the new nominee. Confirm the eligibility points above. Take written consent from the new person before you name them (rule 4(5), Companies (Incorporation) Rules, 2014).
Step 2. Write to the company. As sole member, give the company a written intimation. Name the new nominee and enclose the new nominee's written consent (rule 4(3) proviso and rule 4(5), Companies (Incorporation) Rules, 2014). On a withdrawal, the company then files the notice of withdrawal together with the new nomination (rule 4(4), Companies (Incorporation) Rules, 2014).
Step 3. File Form INC-4 with the ROC. The company files Form INC-4, with the fee, on the MCA portal (rule 4(4) and the proviso to rule 4(5), Companies (Incorporation) Rules, 2014). The new nominee's consent is no longer a separate Form INC-3. Since 23 January 2023 the particulars of consent go inside INC-4 as a declaration (rule 4(4) and rule 4(5), as amended by G.S.R. 42(E) dated 19 January 2023, in force 23 January 2023). The fee is set in the Companies (Registration Offices and Fees) Rules, 2014; check the current figure on the MCA portal before you file.
Keep the paper that shows the date you received the withdrawal notice or gave your intimation. The 15-day and 30-day periods run from those dates.
What if the member (you) has died?
Then this article is for the nominee, now the new member. The rule has a separate clock:
- The new member must nominate another person within 15 days of becoming the member (rule 4(6), Companies (Incorporation) Rules, 2014).
- The company must file the intimation of the cessation and the new nomination in Form INC-4 within 30 days of the change in membership (rule 4(6), Companies (Incorporation) Rules, 2014).
The new member must also meet the one-OPC limit, within 180 days, if they are already a member of another OPC (rule 3(3), Companies (Incorporation) Rules, 2014). Death of a person involves other steps (directors, bank, tax). Speak to a CA early.
What not to do
- Do not leave the seat empty. The rule requires another nominee within 15 days of a withdrawal. The Act requires the memorandum to carry a nominee (first proviso to s.3(1)(c), Companies Act 2013).
- Do not name a person without asking first. The law needs prior written consent (first proviso to s.3(1)(c), Companies Act 2013).
- Do not name someone who is already a nominee elsewhere. Rule 3(2) bars it.
- Do not name a minor. Rule 3(4) bars it.
- Do not file the old Form INC-3 for the consent. For these changes the consent particulars now go in INC-4 (rule 4, as amended in 2023).
- Do not treat the notice as the company's problem. The rule's penalty applies to both the company and "any officer of the company" (rule 5, Companies (Incorporation) Rules, 2014).
The cost of getting it wrong
If an OPC or any officer breaks these rules, the OPC and the officer are each liable to a fine that may extend to ten thousand rupees. A further fine of up to one thousand rupees applies for every day after the first on which the default continues (rule 5, Companies (Incorporation) Rules, 2014).
What to do now
- Next step: Get a written consent from an eligible new nominee, and give the company your written intimation naming them (rule 4(3) proviso and rule 4(5), Companies (Incorporation) Rules, 2014).
- Deadline: In case of withdrawal, name the new nominee within 15 days of receiving the notice, and have the company file Form INC-4 within 30 days of receiving it (rule 4(3) proviso and rule 4(4)). In case of death or other change, the company files INC-4 within 30 days of receiving your intimation (rule 4(5) proviso).
- Consequence of delay: A fine of up to ten thousand rupees on the company and each officer, plus up to one thousand rupees for each day after the first that the default continues (rule 5, Companies (Incorporation) Rules, 2014).
Have a CA review your facts before you act or file.
FAQs
1. My nominee died. Do I have to file anything?
Yes. Name a new person, get their written consent, and tell the company in writing. The company then files notice of the change in Form INC-4 within 30 days of receiving your intimation (rule 4(5) and its proviso, Companies (Incorporation) Rules, 2014).
2. Can my new nominee live abroad?
Yes, if the person is an Indian citizen. Since 1 April 2021 the rule reads "whether resident in India or otherwise" (rule 3(1), Companies (Incorporation) Rules, 2014, as amended by G.S.R. 91(E), 2021).
3. Can I change my nominee just because I want to?
Yes. You may change the nominee "at any time for any reason" by written intimation to the company, with the new person's prior consent. The company files INC-4 within 30 days (rule 4(5) and its proviso, Companies (Incorporation) Rules, 2014).
4. Is Form INC-3 still needed for the nominee's consent?
For a change of nominee, no. From 23 January 2023 the rules replace the separate INC-3 consent with particulars of consent given as a declaration in Form INC-4 (rule 4, Companies (Incorporation) Rules, 2014, as amended by G.S.R. 42(E), dated 19 January 2023). For the incorporation filing itself, the nomination is made through Form INC-32 (SPICe+) (rule 4(2), as amended).
5. Can one person be nominee in two OPCs?
No. Rule 3(2) says no person may become nominee in more than one OPC. A person who becomes a member of a second OPC by being its nominee has 180 days to meet this limit (rule 3(3), Companies (Incorporation) Rules, 2014).
6. What is the fee for Form INC-4?
The fee is set in the Companies (Registration Offices and Fees) Rules, 2014 (rule 4(4), Companies (Incorporation) Rules, 2014). Check the current figure on the MCA portal before you file.
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