Bare or possession trust registration vs. nominee directorship: if you are looking to maximise the profitability of a business while also keeping your control of it private, there are a number of options from which you can choose. Amongst the most popular for UK business people are the use of bare or possession trusts and the appointment of nominee directors.
Depending on what you are hoping to achieve, each of these choices could be right for you. Here at Coddan Formations Agency, we know British and overseas business legislation inside and out and specialise in giving our clients' ventures the most advantageous formation possible. This guide offers an overview of these key choices.
Why choose bare or possession trusts? In a bare trust, the beneficiary can claim the income and the capital at any time. This is as opposed to a complex trust, in which funds do not need to be paid straight away. Possession trusts, or interest in possession trusts, offers all beneficiaries a share of the income generated by the trust or the right to use its assets in some way.
As new legislation is making it harder to control the UK companies without full disclosure of your interest on a publicly available register, many smart business people are now using various types of trusts through which they can operate a business and keep their interests hidden. When used properly this can be effective, so long as you are not the majority shareholder in the trust. It can also lower your tax and boost your income.
Why choose nominee directorships? As UK law demands any newly registered company must appoint a director, many business people establishing a new company will appoint a nominee in this position.
The nominee director's name can be used for all public records, meaning you can operate the business from a position of confidentially. Your nominee can also take care of all the everyday legal requirements, meaning a greater amount of flexibility and a smaller number of personnel.