We believe it’s not news for you that every company must have a board of directors. The board is to consist of at least one director and it’s very logical for the beneficial owner of a non-resident offshore company to appoint himself or herself as a director of the corporation or employ a professional manager for that position. However lots of companies are formed with a nominee director. Why is that so?
Using Nominee Service to Protect Your Privacy
The officers and directors of corporations are typically listed in public records. Even if the Registry of an offshore jurisdiction does not keep the according database the details of the director may be available for public from other sources. Many corporate leaders do not want their names to be publicly listed.
Functions of Nominee Director
A nominee director is a director whose function is passive in nature. The director receives a fee for lending his or her name to the organization. However the beneficial owner remains in control.
In most cases the nominee provides the beneficial owner with a general power of attorney empowering the latter to run the business, manage the company’s activities and open and operate the company’s bank accounts.
Under special arrangements the nominee may be involved in signing (contracts, loans, company accounts, annual returns etc.) for the company and holding the signature authority for its corporate bank accounts. At the same time he or she is not actually entitled to manage the company. The nominee director cannot and will not enter into any real business contract or financial or moral commitment. The beneficial owner is still fully responsible for running of the company.
Indemnity Agreement with Nominee Director
To ensure and guarantee safety of a nominee director the beneficial owner and a nominee director may wish to sign a director indemnity agreement or letter.
Nominee service is a perfectly legal device, which preserves the privacy of individuals who would rather not disclose their interest or association with a given corporate body.
The service is primarily designed to help people who keep companies fully compliant with the law to protect the identities of the persons actually controlling the company.