Nominee Limited Company Shareholders and Nominee UK LLP Designated Partners. Who is a Nominee Shareholder?
There is a statutory requirement for a minimum of one shareholder and for the details of shareholders to be put on public record. It goes without saying, that a watertight limited company for tax purposes should not have any details pertaining to the private investor on public record. For this reason, we will provide you with a nominee shareholder with a view to securing your corporate and financial privacy and anonymity. Upon incorporating a company (be it a new or ready made, shelf company or a tailor made company), you can either act as a shareholder yourself, or we can provide you with a nominee shareholder with a view to securing your corporate privacy. Coddan have designed a specialist service to provide our clients with anonymity from their limited company. By appointing our corporate nominee shareholder (£100.00 per year) you can remain anonymous from your company as no personal details will be recorded at Companies House. A nominee is normally a company created for the purpose of holding shares and other securities on behalf of investors. With our service the nominee is not the legal owner of the shares, and the underlying investors have the "beneficial interest" in the shares: i.e. they are entitled to all income and capital gains on them.
Upon taking on the duties of Nominee Shareholder, we would hold your shares on trust in the form of a Nominee Shareholders agreement. Our Nominee Shareholders agreement would serve the purpose of ensuring that your identity as Beneficial Owner(s) is only known to us and not put on public record at the Company's Registry.
For the purpose of privacy some clients do not wish to be identified as shareholders of the companies that they have set up and will therefore wish to appoint nominee shareholders. Coddan can provide nominee shareholders for the companies it administers. These nominee shareholders will hold the shares on trust for the beneficial owners and only they will be identified on the register of shareholders. Each nominee shareholder appointed will sign a declaration of trust to the beneficial owner that they are holding the shares on behalf of the beneficial owner and will return the shares into the name of the beneficial owner or will transfer them to another party as requested. A nominee shareholder is normally a company created for the purpose of holding shares and other securities on behalf of investors. With our service the nominee is not the legal owner of the shares, and the underlying investors have the "beneficial interest" in the shares: i.e. they are entitled to all income and capital gains on them.
Limited liability partnership. To form a British LLP, there must at the outset be at least TWO PEOPLE who are associated for the carrying on of a lawful business with a view to profit and who subscribe their names to a document called an "incorporation document". The incorporation document must be delivered to the registrar. A statement must also be delivered to the registrar that there has been compliance with the requirement that at least TWO PERSONS, associated for the purpose of carrying on a lawful business with a view to profit, have subscribed their names to the incorporation document. The statement must be made by a subscriber to the incorporation document or a solicitor engaged in the formation of the LLP. The incorporation document must contain various items of information: the name of the LLP, whether the registered office is to be situated in England and Wales, in Wales or in Scotland, the address of the registered office, the name and address of the persons who are to be members on incorporation and whether some or all of the members are to.
British and Scottish LLP Members. The first members of a LLP are those who signed the incorporation document. After incorporation, any person may become a member of a LLP by agreement with the existing members. The rights and duties of the members of a LLP to one another and to the LLP are governed by the provisions of any agreement between the members, subject to the provisions of any enactment. The Act does not require an agreement to be entered into between the members and there is no requirement to publish it. In the case where there is no agreement on any matter the mutual rights and duties of the LLP and its members will be governed by default regulations made under Section 15(c). The default regulations will make provision concerning various matters, including the entitlement of members to share equally in the capital and profits of the business and that every member may take part in the management of the LLP.
Coddan can provide a nominee company secretary for your private limited company or for your limited liability partnership. The nominee company secretary service is ideal for sole directors unable to find someone to take on this role. It means you can still operate a limited company as sole director and shareholder whilst benefiting from the excellent support of a professional company. Our annual fee includes the cost of processing the company's Annual Return each year. Our one off fee is all-inclusive for the 12-month period with no hidden charges. If you wish to keep your name off the Public Records, so that it is easy to discern that you are involved with a company, then this is the service for you. The nominee will sign all corporate documents, except those that are not lawful or that bring personal liability to the nominee. There is a yearly charge for the nominee service. By appointing our corporate nominee director you can remain anonymous from your company, as no personal details will be recorded at Companies House. This service has been designed to allow our clients to retain their privacy for legitimate reasons in a world where your personal information can easily be obtained by anyone that knows where to look. This service is not to be used for any illegal purposes. If you are seeking anonymity for illegal reasons, please go somewhere else to incorporate.
You will still control the company as an authorised representative (by General Power of Attorney) but it will not be possible to search Companies House records to identify you. This General Power of Attorney gives the Attorney authority to take decisions and actions on behalf of the company. These include buying or selling property or shares, signing cheques etc. This General Power of Attorney allows the Attorney to open, operate and close any bank or building society account in the company's name, and a Power of Attorney that allows the Attorney to sign cheques on behalf of the company.
Can Anyone Apply for a Share in a Company?
Yes, anyone can openly apply to the company for shares. The company is obligated to issue the shares either through advertisements or through a prospectus. Anyone from the general public may apply against the advertisement and the company is responsible to ensure that no prospective investor is sidelined. When a company is formed, the person or people forming it decide whether shares will limit its members' liability. The Memorandum of Association (one of the documents by which the company is formed) will state: the amount of share capital the company will have; and the division of the share capital into shares of a fixed amount. The members must agree to take some, or all, of the shares when the company is registered. The memorandum of association must show the names of the people who have agreed to own shares and the number of shares each will own. These people are called the subscribers. A member is liable to pay up the nominal value of each of his shares and the amount owing to the company is a debt which can be "called up".
If a member refuses to pay all or any call on a share, the company may use forfeiture proceedings if permitted by its articles. A typical procedure is set out in paragraphs 18-22 of Table A of The Companies (Tables A to F) Regulations 1985 (if alternative provisions have not been adopted). As these proceedings are of a penal nature the regulations must be followed exactly, otherwise the court may declare forfeiture proceedings void. A forfeited share may be sold, re-allotted or otherwise disposed of at the discretion of the directors. Companies House need not be notified of the forfeiture or re-allotment except in the list of members on the company's next Annual Return. If a member cannot pay a call on shares, and if the member and the company agree, the shares may be surrendered to the company. This has the same effect as forfeiture but avoids the formal procedure. The company may only accept surrender if it could have used its power of forfeiture. A private company may hold forfeited shares indefinitely pending re-allotment. A public company must cancel the forfeited shares if they are not otherwise disposed of after three years. If the cancellation were to reduce a public company's allotted capital below the statutory minimum, it would have to re-register as a private company. A company cannot use forfeited shares for the purposes of voting.
Can I Buy Shares From Someone Else?
Shares in a public company are normally transferred through a broker dealing in the market appropriate to those shares, that is, the Stock Exchange or the Alternative Investment Market. However, shares may be transferred directly from seller to buyer and the company informed accordingly. Shares in a private company are usually transferred by private agreement between the seller and the buyer. In both cases, a transfer document must be completed. The transfer of shares is normally a chargeable transaction under the Stamp Act. Stamp Duty is payable to the Inland Revenue on the aggregate amount at Ѕ% rounded up to the nearest multiple of £5.00.
How are Shares Transferred to New Owners? The transfer of shares in a public limited company is dealt with through the Stock Exchange's 'Crest' system. To transfer shares in a private or unlimited company, a seller must complete and sign the appropriate section of a 'stock transfer form', available from law stationers, and pass it, together with the share certificate, to the new owner. The new owner must then complete their section of the stock transfer form, pay any stamp duty to the Inland Revenue and pass the completed form and share certificate to the company. The company secretary will then arrange for the directors to authorise the change to the members' register and issue a share certificate in the new name.
Annual Return
Every company must deliver an annual return to Companies House within 28 days of its made-up date. A company's director(s) and secretary are responsible for ensuring that the annual return: is delivered to Companies House within 28 days after the anniversary of incorporation or the anniversary of the made-up date of the last annual return; and gives a true picture of the management structure and capital (if applicable) of the company at the made-up date.
What is an Annual Return (Form 363)?
An annual return is a snapshot of certain company information at the made-up date. It is separate from a company's annual accounts. An annual return must contain the following information: the name of the company. Its registered number. The type of company it is, for example, private or public. The registered office address of the company. The address where certain company registers are kept if not at the registered office. The principal business activities of the company. The name and address of the company secretary. The name, usual residential address, date of birth, nationality and business occupation of all the company's directors. The date to which the annual return is made-up (the made-up date). The nominal value of total issued share capital. The names and addresses of shareholders and the number and type of shares they hold or transfer from other shareholders.
For the purpose of privacy some clients do not wish to be identified as shareholders of the companies that they have set up and will therefore wish to appoint nominee shareholders. Coddan can provide nominee shareholders for the companies it administers. These nominee shareholders will hold the shares on trust for the beneficial owners and only they will be identified on the register of shareholders. Each nominee shareholder appointed will sign a declaration of trust to the beneficial owner that they are holding the shares on behalf of the beneficial owner and will return the shares into the name of the beneficial owner or will transfer them to another party as requested. This service together with the appointment of Coddan directors would ensure almost complete anonymity for the beneficial owners of a company. However, clients should recognise that legislation in some jurisdictions would require the disclosure of the identity of beneficial owners to the appropriate legal authorities but even they cannot disclose this information unless required to do so under specific legislation usually associated with fraud or money laundering.
Upon taking on the duties of nominee shareholder, we would hold your shares on trust in the form of a nominee shareholders agreement. This will avoid having the name of the legal owner on the Share Certificate, Register of Members and the Annual Return. Our nominee shareholders agreement would serve the purpose of ensuring that we only know your identity as beneficial owner(s) and not put on public record at the Company's Registry. An original share transfer form signed by us, but undated, will be issued to you, so that you can have the security of being able to transfer the shares at any time. Nominee shareholder/corporate management service includes attorney preparation and execution of all necessary documents including the management agreement, stock transfers and resolutions. This service is perfect for anyone desiring asset protection in addition to privacy.
Question: What is the role and advantage of nominee shareholders?
Answer: If Coddan provides nominee services to UK (USA or offshore) companies which are beneficially owned by clients, it will be the legal shareholder of the respective UK (USA or offshore) company. As a shareholder, Coddan will be listed on public record at the UK Companies Registry. The beneficial ownership of the company is not required to be revealed and therefore confidentiality is maintained. Its directors at the annual general meetings and extraordinary general meetings of the relevant client company will represent by Coddan.
Question: What documents does the client receive which confirm that he is the beneficial owner of the company?
Answer: Coddan will prepare deeds of trust specifying that shares are held on behalf of the client. These deeds of trust will be given to the client.
Question: What is the procedure if the client wishes to sell or transfer his shares, which are held by Coddan to another party?
Answer: At the time of execution of the deed of trust, the client will be given a share transfer form signed by Coddan, which will allow the client to transfer the shares held by Coddan. This form will have to be returned to the registered office of the company in order for the transfer to be processed and recorded on public record.
Coddan will not get involved with share sale negotiations. Usually we cannot act for both parties to the purchase and sale of shares unless we are specifically requested to do so and have satisfied ourselves that both parties have taken independent financial and legal advice and that there is no conflict of interest. The above information is general and is intended as a summary only. Clients should seek further clarification if required before deciding if they wish to engage nominee shareholders. We look forward to doing business with you and greatly appreciate your interest in obtaining a service from Coddan. Certain matters are left to the shareholders in general meeting under the Companies Act, such as amendments to the articles of association or memorandum of association, a resolution for a voluntary winding up and alteration of the capital structure of the company.
Some issues may be reserved for shareholders to determine. Despite the assumption of control of the company's affairs by directors under the articles of association, the courts have acknowledged circumstances in which the shareholders in general meeting must take charge of the reins. Deadlock in the boardroom, inability to fulfil the management role, or the fact that the board has ceased to exist, will vest power in the shareholders, to overcome the incapacity.
However, once the board is again in a position to function as envisaged under the articles of association, power is returned to the board.
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