Nominee Services
In most jurisdictions there is no requirement that a shareholder of Director or Secretary of a company should reside within that jurisdiction. However the use of Nominees in the structure of a company may be a vehicle to serve different purposes and the need for this may vary from client to client. These needs are primarily commercially driven and are usually founded on tax planning, asset protection, or confidentiality. The nominee structure is also known as the Trustee, Fiduciary or Agency structure.
Nominee Shareholders or Directors may be nominated before the formation of a company or before the title of the assets is passed to them. Nominees in general are representatives/agents or trustees of the actual owner who continues to have control of the assets which the nominees hold on his behalf. Nominees normally sign either a trust deed or a nominee/management agreement so that they are legally bound to exercise their rights and obligations in a fiduciary way. By law, a fiduciary undertakes to act for and on behalf of his beneficiary (his Principal) in a particular matter in circumstances which give rise to a relationship of trust, confidence and undivided loyalty. A fiduciary has the the highest standard of duty and care in equity or law so that there must be no conflict of interest between him and the beneficiary. The fiduciary must not profit from his position or knowledge that comes with it and is only allowed to be paid a stipend if he is a professional service provider.
Asset Nominees
Asset Nominees are persons (which may be either legal entities or individuals) who are designated by the beneficial (actual) owner of the assets (e.g. movable property such as company shares or funds in a bank account, or immovable property such as real estate) to hold the legal title of that property in his/her name on trust for (on behalf of) the beneficial owner who in reality is the person entitled to those assets. In some jurisdictions there are public records that list the names of the nominee shareholders, whereas in others these are secret and no requirement for disclosure exists.
Asset Nominees sign a trust deed in the presence of two witnesses, which is a legal instrument proving the fact that the Assets are held by the Nominee for the benefit and in favour of another person (the beneficial or actual owner). A nominee trust is a legally binding deed whereby one person appoints a Nominee to be listed on the legal title of the assets, or other relevant documents, on his/her behalf. Asset Nominees usually sign a Trust deed for every separate type of property that they hold on behalf of the beneficial owner as these by span different jurisdictions of may be governed by different provision of the law. The arrangement is simple and passive and the Nominee is to do nothing except what they are directed to do by the beneficiary.
One use of Asset Nominees is to avoid reporting the ownership of assets on the public record for legal purposes and easier handling of those assets, but also to protect the anonymity of the beneficial owner of the company. Some examples:
- In some jurisdictions real estate may only be bought by people residing in that jurisdiction, so an alien who would like to invest in property in that jurisdiction should first obtain a licence to purchase it. Using nominees bypasses this requirement, because the title deed of the property, or other filed documents lists the trustee as the owner, but does not name the undisclosed beneficial owner
- There are also many reasons for avoiding disclosure of the beneficial owners of companies e.g. non-competition obligations, so if the shares of a company are held in the name of a nominee there is no breach of the obligation of the beneficial owner not to compete.
A nominee shareholder is the official shareholder of the shares of a company and his/her name shall be registered in all public records or certificates. In law he is the shareholder of the company by in equity the real shareholder shall be the beneficial owner who holds a trust deed form the nominee shareholder.
The nominee shareholder shall exercise all voting rights conferred to the holder of the shares as provide by the articles of association (constitution) of the Company. the services of a Nominee Shareholder are provided under specific terms and conditions contained in a nominee agreement that is signed by both the Nominee (who may also be a nominee service providing company) and the beneficial owner. Such agreement usually provides that:
- The nominee shareholder shall exercise the share voting rights according to the beneficial owner’s instructions
- The nominee shareholder shall assign the right to any dividends and/ or profits payable in respect of the shares according to the beneficial owner’s instructions
- Since most companies are of limited liability, beneficial owners do not usually provide indemnity to nominee shareholders, but if the nominee requires it, this can be given by the beneficial owner to protect him/;her from any liability, expense or damage suffered by the nominee in connection with the provision of his services
- The Nominee shareholder may also be required to sign an undated resignation letter so that the beneficial owner may end his services appoint another director of his choice at any time.
Office Nominees
Office Nominees are persons (which may be either legal entities or individuals) who are designated by the actual owner of the Office (e.g. Director or Secretary of a company) to hold the Office on behalf and under the directions of the real owner. There are two types of office Nominees:
Directors: They are the officers of the company who take all executive decisions. A nominee director shall be considered as a legally appointed director of the company who can exercise every executive power but also bears all responsibilities of his Office. However, the services of a Nominee Director are provided under specific terms and conditions contained in a nominee agreement or management agreement that is signed by both the Nominee (who may also be a nominee service providing company) and the beneficial owner. Such agreement usually provides that:
- The Nominee Director shall be passive and shall hot get involved with the management of the company, its financial affairs or operational matters of the company.
- The Nominee Director shall take and follow the lawful instructions of the beneficial owner. Because Directors (regardless of whether they are nominee or actual Directors) are liable to the eyes of the law for every unlawful commission or omission of the company, Nominee Directors are only obliged to follow the instructions of the beneficial owner to the extent that these are not contrary to the law.
- The Nominee Director may also be required to sign a general Power of Attorney deed with which the Nominee shall appoint the beneficial owner to act on the Nominee’s behalf in carrying out any activities pertaining to the functions of the Director of the company, so that basically the Nominee is mostly kept out of the business of the company which is conducted by the beneficial owner who is not officially or directly associated with the company.
- The Nominee Director may also be required to sign an undated resignation letter so that the beneficial owner may end his services appoint another director of his choice at any time.
- The beneficial owner shall sign a letter of indemnity for any liability, expense or damage that the Nominee Director may suffer in connection with the provision of the Nominee Director services.
Secretaries: In most jurisdictions companies are required to have at least one secretary. Secretaries are Officers of the Company; their duties are those of the chief administrative officer of the company. The company Secretary is responsible for the efficient administration of a company, particularly with regard to ensuring that the company is in good standing by complying with statutory and regulatory requirements and for ensuring that decisions of the board of directors are recorded and (if they are within the secretary’s duties and not managerial in nature e.g. transfer of shares, increase of share capital etc.). Like Directors, Secretaries are usually not required to be resident in the jurisdiction.
We offer a complete range of nominee services including amongst others:
- Provision of registered agent.
- Provision of nominee shareholders or other asset nominees.
- Provision of nominee Directors
- Provision of nominee Secretary. click here for information
The details of these nominees shall appear on the corporate documents instead of the beneficial owners or persons who have real control of the company. As explained in detail above, these nominees shall have no control over the management of the Company or its assets. We are able to offer you the choice of resident and Non-resident directors or shareholders in all Jurisdictions as per Statutory requirements.