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The offshore nominee directors are the agents who do not exercise any authority with the corporation. The name of the Directors will be written in the Company's reports. Although you need to select a person who can be a trustworthy nominee director.
A nominee director is nominated by the financial institution in the assurance of the provisions of any law for the time being in force or of any agreement, or appointed by Central Government or State Government and any other person to represent its interest. It is the duty of the debenture trustee to nominate a Director on the Board of the Issuer Company. A Nominee Director or any other Director is bound by rules of confidentiality of Company and they cannot share any type of information with his/her Nominator.
Appointment procedure for the Nominee Director:
- Ensure that the appointment of a nominated director is approved by the Articles of Association (AoA). If the AoA does not permit the appointment, then change the AoA accordingly.
- Bypassing a resolution at the Board meeting, the appointment of the Candidate Director can be accomplished. Notice of the meeting of the Board to be held should be given to all Directors.
- In addition, a meeting of the Board will be held and a motion to name the candidate director will be passed.
- The Secretary of the Company or any of the Directors shall sign and file the related documents with the Registrar of Companies ( RoC) after the resolution is passed.
- A declaration concerning his interest in other institutions must be submitted by the designated nominee director and his / her consent should be granted.
Necessary documents for the Appointment of Nominee Director:
- The Proposed Nominee Director's Identification Number (DIN) Directors
- The Proposed Nominee Director's Identity Proof
- The Proposed Nominee Director's residential facts
- The Proposed Nominee Director's Permanent Account Number
- Letter of appointment
- Certified Copy of the Board Resolution
- Consent Form signed by the Nominee Director
ROLES AND RESPONSIBILITIES
Act as security: A nominee director must supervise the investor company's activities to ensure those policy decisions are focused on sound business lines, reasoning to appropriate protections, and also serve as a liaison between the investor company and the nominator.
Participation and decision-making: A nominee director is a non-executive director; however, he should be actively involved in decisions affecting the investment firm's financial results, fund-raising activities like debt raising, acquisitions, etc.
Maintain confidentiality: In the case of a listed company, a nominee director should exercise sufficient care and caution when dealing with undisclosed price sensitive information. He can control, track, and disclose trading by insiders framed by the listed organization, the nominee director is also expected to abide by the code of conduct.
