Is it a smart option for offshore companies to opt for the services of nominee director?

By: jlucy668
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While registering a limited company, people often seek the help of nominee director services. Individual private companies may have different reasons to appoint nominee directors, but their ulterior aim is the protection of the identity of the real owner. All registered companies have to reveal the names of their directors in the Articles of Incorporation. However, there are several company owners and shareholders, who do not want the mention of their names in association with the limited company. Nominee director services come to their aid during this time and protect their interest without diminishing their control over the business. It is a legal way of gaining protection without relinquishing control.

 

Are the nominee directors out to assume control of your company?

Most of the times the clients worry about the nominee director gaining influence over their offshore company. However, the appointed director is a nominee and only holds limited power. The real owner or shareholder of the company maintains his or her rights to the company’s share and bank accounts. The nominee has to issue a general power of attorney in exchange for their appointment that returns the decision-making power within the company to the real shareholder.

During the appointment of a nominee director, the appointer makes it clear that they are titular directors with the right to act in the interest of the company. When the time comes to make governing decisions, the ball will stop at the director’s court. They can, in no way, decide against the company’s interest or the director’s interest. However, several situations might make the job challenging for even the best of the best individuals working in the fields of administration and commerce. Therefore, the smartest way to go about this is by appointing a trustworthy and highly recommended nominee director service that can cover all grounds for your offshore company.

 

The official you appoint should be able to uphold the company’s interests

You must remember that the nominee director acts as the public administrator in your corporation. There will be several instances where the Minutes of the Board of Directors will require their signature. It is essential that you find a nominee director service that you can completely trust. During the lifetime of a corporation, there will be several situations that will elicit conflict of interests in the duty of the nominee. That is especially prominent when a company enters the state of insolvency. During such circumstances, it is the responsibility of the director(s) of the company to act according to the interests of the creditors. However, this can create a direct conflict. The duties of the nominee director are unlikely to align with the interests of his appointee. The laws of commerce vary significantly from one corner of the world to the other. Therefore, in case you are planning to open an offshore company in Singapore or any other competitive Asian market, you will need a reliable nominee director service on your speed dial to defend the interest of your business.

 

The nominee director should be able to make independent decisions

The nominee will be an employee of the actual stakeholder or director of the company. He or she can also be an officer of the company appointed. They often have multiple legal duties that put them in the way of conflicts of interests. In fact, several statutory bodies go to the extent of defining the avoidance of such a conflict of interest as one of the duties of the nominee director. Additionally, they must maintain confidentiality during decision making. Therefore, they must keep the independence of thought and discretion during the process. However, it is impossible for an otherwise amateur or legally unaware nominee to preserve his impartiality of judgment. His loyalty towards the appointer, the commercial expectation of the decision and the influence of other’s opinions are enough reasons to compromise his independent thinking.

 

They should promote the success of the business in the present and the future

It should also be the duty of the nominee director to support the success of a company. Although the “success of a company” lacks a precise definition, you can think of it as the collective good of the stakeholders. When an appointer approaches a nominee director service, he or she has a few particular interests in mind. Thus, the promotion of a company’s success becomes tortuous in the presence of an officer, who serves the interests of one of its stakeholders. Balancing the benefits and facilitating the greater good of a corporation is not easy. Without professional and legally trained nominee director services, you will find it extremely difficult to overcome such trials without running into a deadlock.

 

The nominee director should be able to take care of official paperwork

The nominee director should also be able to take care of sponsorships and funding from local banks. When you are opening offshore companies, the law requires all directors and stakeholders to travel to the country for clearing the first rounds of bank interviews. For large corporations, it is often impossible for all shareholders to move to a foreign location at the same time. In such events, the presence of nominee director(s) can help the entrepreneurs. The presence of one or more nominated directors eliminates the requirement of all shareholders to be present at the venue. Several banks require the company directors to provide commercial references, permits, personal references and other paperwork for the funding process. After you appoint a nominee director, you will not have to worry about the paperwork anymore.

In the ideal situation, you should be able to enjoy the services of a nominee director, but at the same time, you should have the complete right to your company’s financial decision making. The director should be free to make decisions in the best interests of the company. Thousands of companies have turned to services of nominee directors in the past, and thousands more do so in the future. There is no reason to worry as long as you are working with the providers, who have the experience and training.

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