Get Nominee Shareholder Declaration Of Trust

A nominee shareholder acts as a legal, unrelated, third party, who is officially registered as the holder of shares on behalf of the actual shareholder.

Any person or body corporate can hold legal title to shares under nomination. Even a minor can be a nominee to shares in a company. If the nominee is minor, then shareholders shall appoint any other person to become entitled to shares in case of the death of shareholders during the minority of the nominee.

On behalf of the actual shareholder, a nominee shareholder only acts as a legal, unrelated, third party who is officially registered as the holder of shares. This shields the actual share owner from being associated with a particular company publicly.

A disadvantage of nominee shareholders is that it involves time and cost to register and maintain details. For the company and the government, it is often difficult to identify the beneficial owner of the shares to be held personally liable for benefits attached to the shares.

In short, a nominee shareholder is just the shareholder of a company in name as the nominee shareholder does not really own shares or anything. On behalf of the actual shareholder, a nominee shareholder only acts as a legal, unrelated, third party who is officially registered as the holder of shares.

The nominee holds the shares on behalf of the shareholder in a 'bare trust'. The relationship is defined by a declaration of trust signed by both parties. Share certificates are issued in the nominee's name, since only they are registered as a member.

The nominee shareholders were/ are usually offered for a fee by the law and accounting firms setting up land companies. This is illegal and these legal consultants could be held accountable.

It's perfectly legal for company shares to be held by one or more trustees on trust for the beneficiaries of a trust or for a nominee to hold share on behalf of actual shareholders.