A nominee shareholder is an ostensible or registered owner who holds shares (stock) on behalf of the actual owner (beneficial owner) under a custodial agreement — also called nominee stockholder.
A beneficiary owner is the legal owner of the shares he or she has purchased from a limited company. The beneficiary owner has the option to remain anonymous, which is where appointing someone to be a nominee shareholder comes in.
The beneficiary owner receives the income or dividends from the share ownership. Still, it is the nominee shareholder who appears on the share certificate and the company’s official documentation and public records.
The nominee shareholder does not own the shares or benefit from the shares in any way. They also have no claim over the shares and have to sign a declaration of trust which states that they will not benefit and that they have no legal claim over the shares, thus protecting the beneficiary owner’s assets.
Nominee shareholders do not hold an official post or role within the private company; the beneficiary owner has shares in. They have no access to bank accounts or other assets and cannot make critical decisions or sign documentation on behalf of the company limited by shares. They are mostly a name on a shares certificate and any official documentation relating to the company’s registration.
What is a Nominee Shareholder, and what are the benefits of having one?
When registering a private company, several legalities are important to get right. This includes naming the roles of the director and shareholder, for example. This information is public record and could, therefore, create problems if the shareholder wishes to remain anonymous.
According to Irish company law, all shareholder’s information must be recorded. So, if, as the beneficiary owner, you wanted to protect your identity as the legal owner of a company, then a nominee shareholder is the answer.
They act as a legal, unrelated, third party, who is officially registered as the holder of shares on behalf of the actual shareholder. This shields the beneficiary owner from being publicly associated with that particular company.
Will a Nominee Shareholder benefit from company shares?
It’s important to know that the nominee shareholder does not own shares in the company, or benefit from the shares in any way. They will need to sign a declaration of trust, known as a custodial agreement, showing they have no legal claim over the shares, thus protecting the beneficiary owner’s assets.
They will also have no access to bank accounts or other assets, and they will not be able to make decisions or sign any documentation of shares on behalf of the company.
How do I select the Nominee Shareholder service for my company?
Our nominee shareholder service offer is structured to keep your personal information off the public record while ensuring full legality. We have over 10 years of experience and an excellent track record with our customers, putting their business needs at the heart of every decision we advise on.
Nominee shareholders can be individuals and can be based only in the EU; they do not have to be found in the same country as the beneficiary owner or the company they own shares in. A nominee shareholder is often appointed to protect the identity of the beneficiary owner for commercial or personal reasons. There are many reasons a shareholder may want to keep his or her details and details of their investments private.
The founder of the company is able to appoint a nominee shareholder to fulfill legal requirements during the company’s registration process. For registering a company legally, there needs to be at least one director, shareholder and company secretary on board before the company can be legally formed.
If the company founder does not have people available to fulfill these roles or they do not want to be shown as performing the functions themselves, then appointing nominees is the best option.