How can I protect my underlying ownership of my offshore company where a nominee is engaged to act as director or shareholder?


Where we are engaged to arrange Professional “Nominee” Director or Nominee Shareholder (or Company Secretary) services for your offshore company we supply the following documents with the incorp pack to ensure that your ownership rights are legally (and practically) protected:


  1. Share Certificate
  2. Nominee Shareholder’s Declaration of Trust
  3. Expression of Wishes
  4. An undated meeting minute to facilitate resignation of Director/Secretary and transfer of shareholder (signed but not dated by the Director)
  5. Undated Director’s resignation notification
  6. Undated Secretary’s resignation notification
  7. Signed, undated share transfer
  8. Management Services Agreement


Nominee Shareholder’s Declaration


A Nominee Shareholder’s Declaration is a private document as between the Nominee Shareholder and the underlying beneficial owner of the company whereby the Nominee acknowledges that it is holding the owner’s share/s in the IBC on Trust and as Nominee for the owner as the true underlying “beneficial” owner of the IBC. As well as providing comfort to you (ie in terms of security of ownership) it also gives you the right to (a) attend shareholder’s meetings and (b) require the Nominee to transfer ownership of the Company’s share/s into your name (and or pay dividends to you) at any time.


Expressions of Wishes


An Expression of Wishes is a document that sets out what the underlying “beneficial” owner of the Company wants to happen with his or her interest in the company in the event of death or incapacity. For legal reasons it may be wise for the Nominee Director/Shareholder to keep a signed Expression of Wishes on file; By doing so (if the issue is not dealt with in a Will) there can be no dispute as to what you intended to happen to your interest in the Company in the event of your passing or becoming incapacitated.


As underlying beneficial ownership of shares in an IBC should, strictly speaking, be included as part of the Deceased’s estate, we would recommend that you receive advice as to how to deal with this issue from a local law Firm with expertise in Company, Estate and Tax Law.


Signed Undated Share Transfer and Director/Secretary’s Resignations


As security and for your comfort we ordinarily provide each client with a signed but undated share transfer document.


Consequently if you ever become uncomfortable about the Nominee being the registered owner of the IBC’s shares, possession of this document allows you to quickly and efficiently sign over legal ownership of the Company’s shares into your own name (or the name of some other person or nominee as you may prefer).


Similarly, by providing signed but undated Director’s and Secretary’s resignations (and a signed but undated meeting minute to allow you to give effect to the resignations/share transfer) you are afforded greater ownership security, as well as a user-friendly method by which to later transfer shares and/or change Director/Secretary as needed.


Documentation with respect to changes of Shareholder/Director and/or Secretary need only be dated and returned to the IBC’s registered office to take effect. In most IBC jurisdictions one is not required to file documentation with the registry to legally give effect to such changes.


Note also the Registered Agent in the country of incorporation can’t finalize a change of shareholder without first receiving the original share certificate (which you get as part of the incorp pack) which translates to even more ownership security to you.


Consultancy Agreement


Where nominees are engaged, to avoid any suggestion that your IBC is but a sham corporation, it is important that your relationship with the Company be documented. Commonly this is achieved by you being appointed as an adviser to the Director with certain areas of responsibility (for example you might be appointed, on behalf of the Company, to seek out and do due diligence on aggressive Offshore Investment opportunities). This creates a commercially realistic and transparent arrangement in terms of your ongoing relationship with the Company. Once appointed, it is important that you be seen to making written recommendations to the IBC’s Board of Directors prior to the Company making decisions or taking action. It is also wise to be seen to be invoicing the Company regularly for your consulting services and related out of pocket expenses.


Management Services Agreement


This is the main document governing commercial and managerial arrangements. It is in essence a Director’s/Company Manager’s contract wherein the terms of our appointment are clearly spelt out, as are your rights to hire and fire us. The agreement effectively provides that we are required to act on your (lawful) instructions. The services that we are asked to provide will be set out in the Schedule of the agreement and one or more persons will need to be nominated in the Schedule as the person/s to give advice or instructions to the Company Director. The net upshot of the agreement is it gives you the right to (a) fire us if you are not happy with our performance and (b) to take legal action against us for anything done by us outside the scope of the agreement that causes you loss or damage.


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