A nominee shareholder is the registered owner of shares held for the benefit of another person (namely the beneficial owner). The beneficial owner will normally require the nominee shareholder to execute a declaration of trust in respect of such shares.
A nominee shareholder may be an individual or a body corporate. Brokers adopt the practice of creating a company to act as a nominee shareholder to ease the administration of buying and selling holdings on behalf of their clients.
Reason to use nominee shareholder
There are two main reasons people use a nominee shareholder service when registering a limited company. The first reason is to fulfill legal requirements. The second reason is to enable the beneficiary owner to remain anonymous as a shareholder if that is one of their requirements when purchasing the shares.
When registering a private company it is needed to fulfill the roles of director, shareholder and company secretary. These roles are legal requirements when founding a company, but sometimes the company founder struggles to fill the roles or doesn't want to publicly fulfill the roles themselves. If this is the case then the founder may turn towards nominee services, more specifically in this case, a nominee shareholder service.
A nominee shareholder is a company or individual that takes on the role of shareholder on behalf of the actual shareholder. This means that their name appears on the share certificate and their personal details are logged on all public documentation in place of the actual shareholder. The shareholder, or beneficiary owner, remains totally anonymous。
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