What are the benefits of using a nominee shareholder for a company registration? A nominee shareholder is a limited company or individual that is listed as the registered holder of shares on behalf of another person or company. The nominee doesn't actually own the shares but they are listed as doing so on the share certificate and the company's public records, those kept at Companies House for example. When registering a private company in the UK it is sometimes necessary to appoint a nominee shareholder to satisfy personal, commercial or legal requirements.
The reasons for using nominee shareholders include the need to have at least one shareholder registered at the time of the company's formation. Alternatively, it may be that the actual owner of the shares doesn't, for whatever reason, want their name or address to be listed on public record as a shareholder. If someone invests in a number of organisations they may not want their investments to be on public record so appointing a nominee shareholder is the perfect solution.
It is important to note that a nominee shareholder does not hold an active position or role within the company limited by shares. They are simply listed on the company's records in place of the actual shareholder. The benefits of using a nominee shareholder are: -
Anonymity - as mentioned above, appointing a nominee shareholder enables the person that actually owns the shares to remain anonymous. To achieve total anonymity as part of a company registration, the person registering the company would also have to appoint a nominee director and a nominee secretary to ensure that their name did not appear anywhere on public record.
Remaining anonymous may be a requirement for personal reasons, such as a desire to keep their home address off public records. There may also be commercial reasons involved, such as keeping their name off record for the benefit of themselves and the company.