Nominee director. What is it - a scam or an urgent need for business

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Today, almost everyone knows about the existence of nominal figures in business, but few people really understand why they are needed and is it a scam? Let's figure out who and what position is appointed, a nominee director - what is it, how legal is it, and is it worth getting involved in this type of activity?

Nominee service

Opening job offers, you probably noticed that there are firms that provide nominee service. What does it mean? Such companies contain a whole staff of individuals and legal entities who are appointed to certain positions, while they will have limited access to business information, a limited range of responsibilities and opportunities. For example, the responsibility of a nominee director allows him to sign internal papers and contracts.

What is it for

Nominee shareholder or nominee director - what is it andwho needs? If you do not take into account the illegal and illegal business, many companies periodically need a nominee director.

First example. There are two firms with one director. Between them there is a need to conduct some kind of formal documentary turnover. It is impossible to sign a contract between firms on behalf of one person. Here, the nominal CEO of one of the firms comes to the rescue, on whose behalf the papers will be signed.

Second example. For prestige, a company needs an account in an English bank abroad. The bank refuses to accept a resident of another country as an account manager. In this case, a third-party English clerk is hired, who will be able to open an account in his own name and manage it with disabilities.

Third example. When the founder of the company does not want to advertise his activities, and considers it a trade secret, defending himself from competitors.

Nominee Director

Nominee director - what it is and what it is for, it is clear from the examples listed. But there are other nominal positions. These are nominal shareholders and secretaries. Who's who?

The nominee director executes the orders of the general director or the founder and manages the business in the direction specified in the contract. Most often, a trustee works by proxy. This person has the right to sign and a limited range of powers - he concludes contracts that he is told, opens bank accounts, but does not know, for example, wherethere is an operating office or in which bank the current account is located.

Nominee shareholder

A nominee shareholder is not a rare figure in offshore business. Often a part of the company's shares is registered in his name so that the real owner of the company does not appear in the state register of company owners. Of course, it is quite risky to transfer even a part of the shares into the hands of an outsider, therefore a written agreement is concluded between the real shareholder and the nominee, according to which all dividends received are transferred to the true owner.

Nominee Secretary

This position, like the treasurer, chairman and some other officials, is used quite rarely and in cases where this or that position is obligatory in some countries, but it does not bring any benefit and necessity for business. An example of such a country is Panama. All three positions should be there.

What the Attorney Gets

Work as a nominee director is paid for the time that a person spends in this position, as well as for the risks that he bears, being at such a high rung on the career ladder. After all, there is always a possibility that the head of the business will perform some illegal operation, thereby substituting the one who, according to the documents, is personally responsible for this.

Of course, this risk is very high, so the work is paid quite high.

Most often, such nominee services are provided by law firms, or by individual lawyers and lawyers who are able to assess the risk and know quite thoroughly the specifics of the work of the customer firm. One person is often a nominee director of 5 to 20 small companies.

Risks

An important point is the risks that a nominee director has during his work. Reviews say this post is a scam. Let's find out.

There is no such concept in the legislation of the Russian Federation, and the provision of such services is not considered illegal. The only thing that is prohibited is the organization of a company with the involvement of a nominee, but it is very difficult to prove legally that the hired director was a nominee. Therefore, the risks of a nominee director are extremely small.

Typically, appointments are made by the board of founders, hiring is documented, and any legal delays that arise along the way may appear as in the normal work of a CEO or founder.

Of course, when applying for a position as a nominee director, what it is, a person must understand the risks in the first place. Especially with regard to criminal activity, for which a figurehead is also often put at the head of the company. In general, deciding on such an adventure, a specialist must clearly understand the specifics of what the company does, for what purposes he is hired, and what consequences for him may entail problems and risks that may arise in the management process.firm. Only in this case should you agree to this kind of work. Plus, a specialist must have a legal education so that he can understand the agreement that is being concluded with him.