What documents will I receive after appointing the services of a nominee shareholder? Once you have decided to appoint the services of a nominee shareholder with Coddan Formations Agency, you will receive a number of extremely important documents. These documents ensure that you retain control of your investment despite not being the officially named party.
Although the nominee shareholder is officially registered as the holder of the shares, the beneficial (or actual) owner is able to maintain background possession through the use of a declaration of trust and a nominee shareholder agreement.
Coddan Formations Agency is able to provide this level of security for you through the provision of watertight legal documentation. Due to the fact that the company related to the shares, or the beneficial owner, may not want to record (for confidentiality reasons) that the shares have been entrusted to a third party, it is essential that other means of recognising the real owner are put in place.
A declaration of trust is a private contract which is created to state that the entrusted nominee is merely holding the shares on behalf of the beneficial owner. Declarations of trust are often fairly basic documents in which the custody of shares is acknowledged by the nominee and the basic trust provisions are stated but they do provide protection to the genuine owner. The genuine owner of the shares must be the possessor of this document (or have it securely stored) in order to easily retain ownership of them.
A nominee shareholder agreement is often used interchangeably with the declaration of trust but they can be separate documents. The shareholder agreement will often be more detailed than a simple declaration of trust and will set out specific rules that ensure the nominee will not have complete control over the shares he/she is publicly associated with.
Holding this document will also allow the genuine owner sole control over the sale or division of the shares if they decide to regain control.