The Dormant Fiduciary: Analyzing the Fiduciary Duties of the "Nominee" in an OPC

The introduction of One Person Company (OPC) in Indian corporate law is a landmark which recognizes micro enterprises and individual entrepreneurial ventures to be made formal in a legal and regulated manner. In the past, company law was mostly focused on the idea of association which meant at least two persons had to get together to form a one private limited company. This was the requirement for private limited companies only; for public limited companies, as many as seven persons had to be involved. These old conditions for incorporation often left a single entrepreneur with no option but to open a sole proprietorship, a business structure which is unprotected in many aspects like limited liability and going concern (perpetual succession). The alternatives were that entrepreneurs brought in the so-called shareholders - even family members with a very small portion of shares - to fulfill legal requirements for a minimum number of members, because of this producing a fake plurality while the entity was, in fact, a single-owner enterprise. The Ministry of Corporate Affairs, acting on the advice of the Dr. J.J. Irani Expert Committee on Company Law constituted in 2005, after considering this issue, came up with the idea of OPC in the Companies Act, 2013. The purpose behind this legislative change was to enable proprietors to get into the organized corporate sector and Because of this they could avail benefits like institutional finance, top sector lending benefits as per the Reserve Bank of India, limited liability, and perpetual succession, all this even in the absence of bringing a second shareholder.That said, making a corporate entity whose whole ownership lies in one human being only, presents a structural paradox at a deep level.

@article{ijter2026212606024107,
  author = {Effatunnisa  and Dr Md Adil},
  title = {The Dormant Fiduciary: Analyzing the Fiduciary Duties of the "Nominee" in an OPC},
  journal = {International Journal of Technology &  Emerging Research },
  year = {2026},
  volume = {2},
  number = {6},
  pages = {1-10},
  doi =  {10.64823/ijter.2606001},
  issn = {3068-109X},
  url = {https://www.ijter.org/article/212606024107/the-dormant-fiduciary-analyzing-the-fiduciary-duties-of-the-nominee-in-an-opc},
  abstract = {The introduction of One Person Company (OPC) in Indian corporate law is a landmark which recognizes micro enterprises and individual entrepreneurial ventures to be made formal in a legal and regulated manner. In the past, company law was mostly focused on the idea of association which meant at least two persons had to get together to form a one private limited company. This was the requirement for private limited companies only; for public limited companies, as many as seven persons had to be involved. These old conditions for incorporation often left a single entrepreneur with no option but to open a sole proprietorship, a business structure which is unprotected in many aspects like limited liability and going concern (perpetual succession). The alternatives were that entrepreneurs brought in the so-called shareholders - even family members with a very small portion of shares - to fulfill legal requirements for a minimum number of members, because of this producing a fake plurality while the entity was, in fact, a single-owner enterprise.
  The Ministry of Corporate Affairs, acting on the advice of the Dr. J.J. Irani Expert Committee on Company Law constituted in 2005, after considering this issue, came up with the idea of OPC in the Companies Act, 2013. The purpose behind this legislative change was to enable proprietors to get into the organized corporate sector and Because of this they could avail benefits like institutional finance, top sector lending benefits as per the Reserve Bank of India, limited liability, and perpetual succession, all this even in the absence of bringing a second shareholder.That said, making a corporate entity whose whole ownership lies in one human being only, presents a structural paradox at a deep level.
  },
  keywords = {company, gender, dignity, protection, technology},
  month = {Jun},
}

Copyright © 2025 Authors retain the copyright of this article. This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.