CAN A NOMINEE OF ONE ONE-PERSON COMPANY BECOME NOMINEE OF ANOTHER ONE PERSON COMPANY?
INTRODUCTION
Yes, a nominee of one one-person company (OPC) can become a nominee of another OPC. There is no law that prohibits a person from being a nominee of more than one OPC.
However, there are a few things to keep in mind if a nominee is considering becoming a nominee of another OPC. First, the nominee must ensure that they are able to meet the requirements of both OPCs. This includes having the necessary financial resources and expertise. Second, the nominee must be aware of the potential conflicts of interest that may arise from being a nominee of two OPCs. For example, the nominee may be asked to vote on matters that could affect both OPCs.
If a nominee is considering becoming a nominee of another OPC, they should carefully consider the risks and benefits involved. They should also consult with an attorney to ensure that they are complying with all applicable laws and regulations
Here are some details about the rules for nominees of OPCs:
- A nominee must be a natural person who is an Indian citizen and resident in India.
- A nominee must be at least 18 years old.
- A nominee must not be bankrupt or insolvent.
- A nominee must not have been convicted of any offense involving fraud or dishonesty.
A nominee must not be a director or employee of the OPC
ADVANTAGES
There are a few advantages to a nominee of one one-person company (OPC) becoming a nominee of another OPC.
- Income diversification: By being a nominee of multiple OPCs, the nominee can diversify their income. This can be helpful if one OPC is not doing well financially, as the nominee will still have income from the other OPCs.
- Increased responsibility: By being a nominee of multiple OPCs, the nominee can gain experience and responsibility. This can be helpful if the nominee is interested in a career in business or law.
- Networking opportunities: By being a nominee of multiple OPCs, the nominee can network with other business professionals. This can be helpful for the nominee’s career and personal development.
DISADVANTAGE
There are a few disadvantages to a nominee of one one-person company (OPC) becoming a nominee of another OPC.
- Increased workload: Being a nominee of multiple OPCs can be a lot of work. The nominee will need to keep track of the finances and operations of each OPC, and they will need to be available to vote on matters affecting the OPCs. This can be a lot of responsibility for one person to handle.
- Potential conflicts of interest: If a nominee is a nominee of multiple OPCs that operate in the same industry, they may face potential conflicts of interest. For example, the nominee may be asked to vote on a matter that could affect both OPCs. This could put the nominee in a difficult position, as they may have to choose between the interests of one OPC and the interests of the other OPC.
- Liability risks: As a nominee of an OPC, you may be held liable for the debts of the OPC if it goes bankrupt. This is because you are considered to be a “shadow director” of the OPC. This means that you are responsible for the actions of the OPC, even if you are not involved in its day-to-day operations.
CONCLUSION
Overall, nominee of one OPC becoming a nominee of another OPC. If a nominee is looking to diversify their income, gain experience, and network with other business professionals, then becoming a nominee of multiple OPCs can be a great option. The nominee must carefully consider the risks and benefits involved before making a decision.
HOW AURIGA ACCOUTING HELP YOU
Resignation from Current OPC: If the individual is already serving as the nominee director of one OPC, they would need to resign from that position. Resignation typically involves submitting a resignation letter to the OPC and notifying the concerned authorities.
Acceptance of Resignation: The OPC must accept the resignation of the current nominee director. The resignation acceptance is usually documented through board resolution or minutes of the meeting.
Appointment as Nominee in the New OPC: The individual can then be appointed as the nominee director of the new OPC. This appointment is typically done through a resolution passed by the new OPC’s board of directors.
Consent and Acceptance: The individual being appointed as the nominee director must provide their consent to serve in this capacity for the new OPC. They may need to sign an acceptance letter or a consent form.
Filing with Regulatory Authorities: In India, OPCs are governed by the Ministry of Corporate Affairs (MCA). Any changes in the appointment of a nominee director should be filed with the MCA as required by law.
Updating Records: Ensure that all necessary records, such as the Memorandum of Association (MOA) and Articles of Association (AOA) of the new OPC, reflect the appointment of the nominee director.
Communication: Inform all relevant parties, including the Registrar of Companies (RoC), about the change in the nominee director. This ensures that the nominee’s information is updated in the official records.
