A nominee shareholder is a person or company that holds shares on behalf of another person (the beneficial owner). This is often done to protect the privacy of the beneficial owner, or to comply with regulatory requirements.
To appoint a nominee shareholder, you will need to complete a nomination form and submit it to the company secretary. The form will typically require you to provide the following information:
- The name and address of the nominee shareholder
- The number of shares being transferred
- The date of the transfer
- A declaration of trust, which sets out the terms of the arrangement between you and the nominee shareholder
Once the nomination form has been submitted, the company secretary will update the company's records to reflect the change in ownership.
Here are the steps on how to appoint a nominee shareholder:
- Choose a nominee shareholder. You can choose any individual or company to act as your nominee shareholder. However, it is important to choose a reputable nominee shareholder who will protect your privacy and interests.
- Complete the nomination form. The nomination form will typically be provided by the company secretary. The form will ask for information about the nominee shareholder, the number of shares being transferred, and the date of the transfer.
- Sign the declaration of trust. The declaration of trust is a legal document that sets out the terms of the arrangement between you and the nominee shareholder. The declaration of trust will typically state that the nominee shareholder will hold the shares on your behalf and will exercise voting rights in accordance with your instructions.
- Submit the nomination form to the company secretary. Once you have completed the nomination form and signed the declaration of trust, you will need to submit the form to the company secretary. The company secretary will then update the company's records to reflect the change in ownership.
Here are some of the benefits of appointing a nominee shareholder:
- Privacy: Nominee shareholders can help to protect the privacy of beneficial owners by keeping their names off the public register of shareholders.
- Compliance: In some cases, nominee shareholders may be required by law. For example, in the United Kingdom, nominee shareholders are required for companies that are controlled by non-EU residents.
- Convenience: Nominee shareholders can help to simplify the administration of shares. For example, they can handle the voting of shares and the collection of dividends.
Appointing a nominee shareholder can be a useful way to protect the privacy of the beneficial owner, comply with regulatory requirements, and simplify the administration of share ownership. When choosing a nominee shareholder, it is important to consider the experience and reputation of the nominee shareholder, the fees charged, and the terms of the nominee agreement.
Published: 10/4/2023 5:09:31 PM