One person company and indian succession law

jayesh (Querist) 13 April 2015 This query is : Resolved
Dear Sir,

Mr. A forms a One Person Company (OPC) as per the provisions of Companies Act, 2013 and appoints his friend Mr. B as his nominee to become the member of OPC in case of his death. On A's death Mr. B becomes the member of the OPC.

Can the legal heirs of Mr. A have any claim on the assets/shares of the OPC against Mr. B under the provisions of Indian Succession Act or any other local law?

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Devajyoti Barman (Expert) 14 April 2015
Looks like academic query.

prabhakar singh (Expert) 14 April 2015
Like public and private ltds., a OPC is also a SEPARATE judicial entity where promoter gets benefit of limited liability,a status not enjoyed by a promoter when s/he runs a business in his proprietorship.
But OPC assets does not belong to him then where is the question of devolution of OPC assets upon heirs of its'promoter?

Not only assets but liabilities also devolves by succession,then for a sick OPC
WHEN LIABILITIES WOULD NOT DEVOLVE ON HEIRS
OF PROMOTER,HOW CAN ASSETS DO?

HENCE IT IS NOT EVEN AN ACADEMIC BUT SHEER
CONFUSED STATE OF AFFAIR.

jayesh (Querist) 14 April 2015
Dear Sir,

I appreciate your reply on the assets and liabilities of the OPC.

However, there is no answer as to who will have legal claim on the shares of the OPC- the nominee (i.e. Mr. B) or the legal heirs of Mr. A (the original owner).

How would this situation be interpreted as per the Indian Succession Act?

if possible please cite any judgment.

prabhakar singh (Expert) 14 April 2015
It would be as per nomination made about shares by the owner and in absence thereof, as per law of succession.Under company law nominees of shares are treated absolute owners of shares and not merely trustees on behalf of heirs.

prabhakar singh (Expert) 14 April 2015
As you are already aware that the promoter Shareholder shall have to nominate another person who shall become the shareholders in case of death/incapacity of the original shareholder. Such nominee shall give his/her consent and such consent for being appointed as the Nominee for the sole Shareholder.

Then where is the ambiguity about it.

Rajendra K Goyal (Expert) 14 April 2015
Academic query.

Guest (Expert) 14 April 2015
Two academic queries one after the other!

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