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The essence of a nominee service is that it is the names of the nominee directors and/or nominee shareholders that are indicated in the corporate documentation, according to their designation. Thus the names of the company's beneficial owners are not disclosed to the Company Registry (in Estonia: the Commercial Registry), so that the clients are ensured the utmost confidentiality.
A nominee shareholder is an individual or entity that is granted the responsibility of holding shares of stock on the behalf of the actual owner. A shareholder of this type is accountable to the owner for how the assets are managed, with the terms of that accountability defined in a custodial agreement or other type of confidential document. As part of his or her responsibilities, the nominee shareholder is listed on the registry of the company that issues the shares and is presented in public settings as the registered owner of those shares. In most cases a nominee is a company created for the purpose of holding shares and other securities on behalf of investors. The scope of powers granted to a nominee shareholder is governed by the confidential agreement that is established between the two parties.
One of the main benefits of contracting with a nominee shareholder is that the actual owner enjoys complete anonymity in relation to the ownership of stock in a given company. This means that the actual owner is not publicly associated with the shares or the company that issues those shares, a set of circumstances that is sometimes helpful when the owner does not wish to acknowledge the relationship in public. This may be simply a personal preference for not wanting others to be aware of the owner’s investment decisions or due to a desire to not influence the movement of the stock as the result of that ownership.
There are regulations in place that make it possible to order the disclosure of the actual owner. This type of event may occur if there is some question regarding the legality of actions taken by the owner or the nominee shareholder, making it necessary for one or more government agencies to conduct an investigation. When so ordered by legal authorities, the nominee shareholder must reveal the name and contact information of the actual owner of the stocks, making it possible for those authorities to establish communication with the owner and resolve the issues at hand.
A nominee director is a person who in fact is renting his or her name to you. In other words, the name of this person is used in the incorporation documents instead of yours. They are also taking the management board member positions on paper of the company. Legally, according to the incorporation documents, the nominee is responsible for the company or entity. In addition, if it is the case of a nominee that is also listed as the nominee shareholder, then they in effect also have the related ownership responsibilities as well.
The basic function of the nominee director is to shield working executives of limited companies from the public disclosure requirements. It is a perfect legal device which preserves the privacy of the actual owner. It is designed to help a person who would rather not disclose their interest or association with a given corporate body. Anyone performing a company search on a company with a nominee director would be unable to discover in whose name the nominee director was registered.
The nominee director cannot and will not enter into any business contract or financial or moral commitment or sign any document. This service is primarily designed to help people keep non-trading or dormant companies fully compliant with the law and perhaps to protect the identities of the persons actually controlling the company. At the same time the appointed nominees are not actually entitled to manage the company. We provide the beneficial owner with a Power of Attorney empowering him to run the business, manage the company's activities and open and operate the company's bank accounts.
PS! Please note that where Incorporate in Estonia provides the sole nominal director to the company, the arrangement with our firm for accounting services is mandatory. It has to be assured that domestic laws are followed since our nominee director is responsible for non-compliance (carries both civil and criminal liability).