A One Person Company (OPC) is a unique business structure introduced under the Companies Act, 2013, allowing a single individual to form a company with full control while enjoying the benefits of limited liability. One of the distinguishing features of an OPC is the mandatory appointment of a nominee, who will assume ownership and management responsibilities in the event of the sole member’s death or incapacity. Since the nominee holds a crucial position in ensuring business continuity, there are circumstances where a change of nominee becomes necessary. The process for changing a nominee involves statutory compliance, internal approvals, and timely filings with the Registrar of Companies (ROC). This ensures the OPC remains compliant, transparent, and equipped with a valid succession plan.
The nominee plays a central role in the OPC’s survival during unforeseen circumstances. Their role includes:
- Taking over the company’s ownership if the sole member dies or becomes incapable
- Ensuring uninterrupted business operations
- Maintaining corporate governance continuity
- Safeguarding the interests of stakeholders
Because the nominee becomes the successor by law, appointing and updating nominee information is essential for the legitimacy and long-term stability of an OPC.
A change of nominee may occur due to:
- Withdrawal of consent by the existing nominee
- Death or incapacitation of the nominee
- Voluntary change by the sole shareholder
- Change in relationship or trust between the member and nominee
- Statutory ineligibility (e.g., nominee becoming a minor or disqualified person)
Since a nominee must always be valid and accessible, any changes must be updated immediately.
Section 3 of the Companies Act, 2013, along with Rule 4 of the Companies (Incorporation) Rules, specifies the appointment, withdrawal, and replacement of nominees in an OPC. The law mandates:
- Written consent of the nominee
- Written withdrawal by the nominee, if applicable
- Written appointment by the sole member
- Mandatory filing of relevant forms with the ROC
These provisions ensure proper documentation and regulatory recognition of nominee changes.
Before initiating the change, the OPC must ensure:
- The proposed nominee meets eligibility criteria (natural person, Indian citizen, resident of India)
- Written consent is obtained from the new nominee in the prescribed format
- Withdrawal notice is received from outgoing nominee, if applicable
- The sole member is fully informed and approves the change
6.1 Step 1 — Obtain Withdrawal of Consent from Existing Nominee
If the nominee voluntarily withdraws, they must provide a written notice to the sole member. If the nominee is being replaced by the member’s choice, the company must notify the outgoing nominee in writing. This written record is mandatory for ROC filings.
6.2 Step 2 — Obtain Written Consent from the New Nominee
The proposed nominee must give consent in the prescribed format, confirming their willingness to act as nominee, their eligibility under the Act, and their understanding of responsibilities. This consent is usually taken in Form INC-3.
6.3 Step 3 — Member’s Declaration for Nominee Change
The sole shareholder must prepare a written declaration stating the name of the new nominee, reason for the change, and confirmation that the nominee meets eligibility norms. This declaration forms the legal basis for the nominee replacement.
6.4 Step 4 — Pass Board Resolution (If Applicable)
Though OPC has no Board of Directors in the traditional sense, if additional directors exist, a formal approval is recorded through a board resolution. This step ensures transparency and internal governance.
6.5 Step 5 — Filing of Form INC-4 with ROC
This is the most critical compliance step. The OPC must file Form INC-4 within the prescribed time, along with the withdrawal notice from the outgoing nominee, consent from the new nominee (INC-3), declaration by the sole member, and certified copy of resolution (if applicable). Form INC-4 officially updates the nominee details in the ROC records.
6.6 Step 6 — Update Company Registers and Internal Records
After ROC filing, the company must update the register of members, nominee details in incorporation documents, and internal records and registers to reflect the legal change.
6.7 Step 7 — Acknowledgment and Record of ROC Approval
Once the ROC processes the INC-4 form, an acknowledgment or approval update is received. The company must maintain this record safely for audit and compliance purposes.
A nominee must be a natural person, an Indian citizen, a resident in India (as defined under the Act), not a minor, and not disqualified under Section 164. These conditions ensure that the successor has legal capacity and residence to manage the OPC.
Although the nominee does not participate in company affairs during the existence of the sole member, they must be willing and able to take charge in exceptional circumstances. Their responsibilities include assuming control of the company when triggered, ensuring lawful continuation or closure of the business, and acting in the best interest of stakeholders.
Failure to update nominee details can lead to legal complications in case of the member’s death, operational disruptions, regulatory non-compliance and penalties, inheritance disputes, and invalid management succession.
Updating nominee details on time ensures smooth business continuity, clarity in ownership transition, compliance with Companies Act requirements, lower legal risk for the company, and trust among stakeholders.
Businesses may encounter challenges such as difficulty in obtaining timely consent from nominees, lack of awareness of statutory timelines, errors in INC-4 filing, miscommunication between member and nominee, and failure to update internal registers.
Changing a nominee in a One Person Company is a legally structured and well-defined process under the Companies Act, 2013. It reflects the importance of having a reliable succession mechanism for ensuring business continuity. The process involves obtaining consents, passing necessary approvals, filing Form INC-4 with the ROC, and updating statutory records. While the procedure is straightforward, accuracy and timeliness are essential to maintain compliance and avoid legal complications. A well-managed nominee change strengthens the OPC’s governance, stability, and readiness to deal with unforeseen circumstances.