Nominee Director – What you need to Know

A company maintains its competitive advantage by keeping their resources confidential. This also includes ensuring clients’ anonymity and confidentiality. So, who is a nominee director? A nominee director is someone who acts as a director to a company as per legal requirements, with an aim to protect the identity of the persons who actually have the power to control their company. In other words, they act as a representative to your company but don’t have any authority to control your business operations without your consent.

Who can appoint a nominee director?

Any new or existing business entity can appoint a nominee director. For new entities, the nominee director and company owner shall frame an agreement before rendering the service. The agreement shall also list out the responsibilities of a nominee director. For existing organisations, nominee director shall be appointed upon the approval of the board of directors, after which the agreement will be set between the nominee director and the entity.

Why businesses need a nominee director?

1. Nominee directors shall be appointed if individual members such as company owners don’t prefer to disclose their identities publicly.

2. If the entity have international owners or founders, such corporations might require nominee directors to sign cheques or tax returns. This gives the convenience for owners to handle their business operations irrespective of their location.

Nominee directors are in name only and don’t hold any authoritative power to enforce decisions on company matters. Hiring a nominee director enables owner to flexibly control their business operations whilst maintaining their privacy.