A nominee agreement is an arrangement between two parties where one person consents to acting as a director, secretary or shareholder for a company which is owned by someone else.
How Nominee Agreements Work
A nominee agreement, where one person consents to acting as a director, secretary or shareholder, generally consists of terms which accomplish the following:
Deed of Indemnity
The persons or company acting as the nominee must be indemnified against the potentially harmful actions carried out by the person who actually runs the company.
The agreement is typically known as a deed of indemnity and is signed by the persons purchasing the company nominee services.
Although standard deed of indemnities exists, they can, occasionally be altered to include or exclude specific activities which one or both parties might request.
Power of Attorney
A power of attorney is provided by the nominee to the purchaser as a means to granting that person authority to run and act for the company.
As the nominee will take little or no part in the actual day to day operations of the new business, the real owners of the company require evidence that they own and are in charge of the company.
This is in spite of the fact that there is no visible evidence at Companies House to suggest that they are in any way connected with the business.
A power of attorney will essentially state that the purchaser has unlimited authority to act for the company and that they are the beneficial owners of the shares.