Yes, just as a shareholder in a registered share company can be a nominee, so too can a bearer share holder act as nominee shareholder (ie. where the bearer holds a share as nominee for the underlying beneficial owner, details of which the Registered Agent should have or have access to in view of Know Your Client and Anti Money Laundering obligations).
If I set up a bearer share company and engage a nominee shareholder can I keep hold of my bearer share certificate? If so what are the legal obligations?
Many Offshore jurisdictions have passed laws determining who can hold a bearer share certificate. Commonly the certificate MUST be held be an approved custodian. Seychelles is one jurisdiction that still allows company owners to hold bearer share certificates though the legal requirements have been recently upgraded. Pursuant to recent Amendments to the Seychelles IBC Act, the following now applies in respect of bearer shares issued by Seychelles IBCs:
NAME OF BEARER SHARE HOLDER TO APPEAR IN SHARE REGISTER
The share register of a Seychelles IBC must now include the name and address of each bearer share holder as well as the name and address of each holder of registered shares.
The Bearer Share Amendments effectively specify that a bearer share holder’s name must be stated in the Share Register, but there is no stipulation that this must be the beneficial owner. Accordingly, just as it is legally permissible to have a nominee registered share holder (who holds shares as nominee for and on behalf of an underlying beneficial owner), one can see no impediment to the use of a nominee bearer share holder. It remains a decision for each company owner as to whether they prefer to hold shares directly or via a nominee.
Importantly, whether or not a nominee bearer (or registered) share holder is used, pursuant to laws governing corporate service providers (“CSPs”) in the country of incorporation the company’s registered agent (“RA”) or the RA’s approved regulated Professional Intermediary client/distributor (if that is who sold the company) is required to hold Know Your Client documents (“KYC” ie client due Diligence documents namely proof of ID and proof of residential address) on each underlying beneficial owner as well as each director, shareholder and power of attorney holder of the IBC. Unless the CSP provides professional director or nominee shareholder services, the KYC responsibility may be discharged to a foreign professional intermediary or reseller client who has signed a KYC Agreement.
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