Nominee directors and shareholders

[Luigi]

Hello Everybody,
I'd like to set up a company and one of the options is the nominee directors and nominee shareholders. Can anyone explain me what is really this concept? Does it really worth? Can you trust in this person for example for opening the company's bank account? Did anyone had a bad or good experience? Is it really going to increase my privacy?
Thanks in Advance,
Luigi.

 

[mnschwarz]

If used correctly it can seperate you from company. Basically it is what it sounds like. You nominate someone else to be the director and/or shareholder. You would not be listed on the incorporation documents or any public registry. The director you nominate will be the one signing any contracts and so forth and they basically act on your instructions. Keep in mind everything you ask them to do will have a cost associated with it.

You should be provided a signed, undated letter of resignation from the nominees to put your mind at ease. As with all things though, choosing a reputable company is first and foremost. Have a chat with your chosen company about your concerns and they will explain in detail.

 

[Internationaloff]

Yes, but nominee services are a good choice for privacy on corporate documents and not to hide UBO.

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[Denny]

TO hide the UBO you will need some fiduciary services; however note that even if you have all documents (privately!) that such person acts as a beneficial owner for your interest, there is a risk that some day you will lose everything. Within a month or so I beleive that some court in Jersey has looked through such situaton (a wife has possessed shares for the interest of her husband....until they got diversed and the husband has tried to claim that he was actually the beneficial owner of the shares). The court has ruled that there was a fraud and in such case the court could not confirm that the husband was a beneficial owner!

 

[JohnLocke]

It's taken out of context your statement! You may link to that claim!

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[Denny]

Yes, please: Arrangements to deceive as to beneficial ownership will not be upheld - Al Tamimi v Al Charmaa [2017 | Ogier

The Royal Court also noted that it would not, in any event, have upheld such an arrangement on the basis that it would be contrary to public policy. The Court considered the test set out in the UK Supreme Court decision of Patel v Mirza [2016] 3 WLR 399 in relation to whether or not to uphold an illegal agreement. The Supreme Court had stated that the Court should assess whether the public interest would be harmed by the enforcement of the illegal agreement, which in turn requires consideration of the underlying purpose of the prohibition which has been broken, and whether those purposes would be enhanced by the denial of the claim.

On Essam's case the JFSC was apparently deliberately given incorrect information. The Court noted that a dishonest failure to make complete and accurate answers to incorporation questionnaires would amount to a criminal offence.

 

[Milky Moon]

The only relevant facts:

"The Court confirmed that the burden of proof lay upon Essam to show that he was the beneficial owner of the Companies, and concluded that he had not done so.

On the evidence, the Court was not satisfied that there was any agreement by Rouzin to hold the shares as nominee."

You normally will have a contract with your nominee provider, which proofs the nominee relationship. So all this is not relevant.

Lesson for today: do not put assets in the name of your spouse without a side letter ...

 

[suzy]

Luigi said:
Hello Everybody,
I'd like to set up a company and one of the options is the nominee directors and nominee shareholders. Can anyone explain me what is really this concept? Does it really worth? Can you trust in this person for example for opening the company's bank account? Did anyone had a bad or good experience? Is it really going to increase my privacy?
Thanks in Advance,
Luigi.
Click to expand...

It's going to increase privacy but only for the public average joe! If you try to protect you from taxes it requires a Whole lot more. You need to consult a good tax lawyer to help you, even then, it's still up to the particular case if they accept it or not. Main thing is, it's required that the management and control of the company is in the jurisdiction where the Company is registered.

 

[mnschwarz]

The most important question is why are you considering nominees? And what are you trying to achieve? You can achieve some basic privacy with nominees but it wont help you legally avoid taxes or hide from a thorough investigation. You need more to your structure to achieve these things.