Nominee Requirement at Incorporation

• Every OPC is legally required to appoint a nominee during incorporation.
  
• The nominee must be a natural person, an Indian citizen, and a resident in India.
  
• Consent of the nominee is obtained using Form INC-3, which is submitted to the Registrar of Companies (RoC).
  
• The nominee agrees to take over the OPC in case of the original member’s death or incapacity.
  
• This mandatory provision ensures that the company is never left without ownership.
  

Automatic Transfer of Membership

• Upon the death or incapacity of the sole member, the nominee automatically becomes the new member.
  
• No court or legal order is needed for the succession to take effect.
  
• The nominee assumes full ownership and legal control of the OPC.
  
• The company does not dissolve, and its business continues without interruption.
  
• This structure provides continuity and stability for the company’s operations.
  

Formal Succession Filing

• The new member (nominee) must inform the RoC by filing Form INC-4 within 30 days of the change.
  
• Form INC-4 includes:
  
  • The nominee’s acceptance to become the new member.
    
  • Supporting identity and address documents.
    
• The RoC updates the official records, and the nominee becomes a recognized member.
  
• A new nominee must then be appointed, and their consent submitted through Form INC-3.
  
• This process ensures compliance and proper transfer of rights.
  

Business and Legal Responsibilities

• The new member has the same ownership rights, liabilities, and powers as the original member.
  
• They may choose to continue the business or convert the OPC into another company type.
  
• The new member can also appoint themselves or another individual as director, if necessary.
  
• All company records, bank accounts, and licenses must be updated to reflect the change in ownership.
  
• The new member is responsible for fulfilling compliance obligations and statutory filings.
  

Limitations and Flexibility

• The nominee cannot refuse succession once the sole member is deceased or incapacitated, unless previously withdrawn.
  
• If the nominee is unwilling to act, a replacement nominee must be appointed as per legal procedure.
  
• The nominee’s rights are limited to succession and do not include any role while the original member is alive and capable.
  
• Proper nominee selection and documentation are essential to ensure a smooth transition and avoid disputes.
  
• The OPC model provides a clear and legally supported framework for succession, making it stronger than sole proprietorships.