Who is a Nominee Director?

A nominee director is an executive or a non-executive director, depending on his level of involvement in the company's operations. A nominee director may have the same duties and obligations as any other director, such as acting in good faith, exercising due care and skill, and avoiding conflicts of interest.
However, a nominee director may also have additional duties and obligations to the shareholder who appointed them, such as reporting to them, protecting their interests, and voting according to their instructions.

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What are the advantages of a nominee director?

Advantages:

1. A nominee director can provide anonymity to the business owner or the shareholder, as their name will not appear on the public registry.
2. A nominee director can help avoid excessive taxes for the business owner or the shareholder who appointed them, as they may not be subject to double taxation or additional taxes in certain jurisdictions.
3. A nominee director can represent the interests of the business owner or the shareholder, and protect their rights and benefits.
4. A nominee director can bring expertise and experience to the board, and contribute to the strategic direction and oversight of the company.

Also read: What is an LTD Company UK?

What are the rights and liabilities of a nominee director?

Rights and liabilities are specified in the contract agreement with the business owner or the shareholder who appointed them.
Here are some possible rights and liabilities of a nominee director:

Rights:

1. A nominee director has the right to access the books and records of the company, and to participate in the board meetings and decisions.
2. A nominee director has the right to receive remuneration or fees for their services, as agreed with the business owner or the shareholder who appointed them.
3. A nominee director has the right to report to the business owner or the shareholder who appointed them, and to protect their interests on the board.
4. A nominee director has the right to resign from their position at any time, subject to the terms and conditions of their appointment.

Also read: What is the role of a UK Nominee Director?

Liabilities:

1. A nominee director has the liability to act in good faith, with due care and skill, and in the best interests of the company as a whole.
2. A nominee director has the liability to comply with the laws and regulations applicable to the company, and to avoid any conflicts of interest or breach of fiduciary duties.
3. A nominee director has the liability to disclose their interest in any contract or arrangement with the company, and to abstain from voting on such matter.
4. A nominee director has the liability to face legal action or penalty if he acts against the interests of the company, or if he violates any provision of the contract agreement with the business owner or the shareholder.