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NOMINEE SHAREHOLDER SERVICE. WHO NEEDS A NOMINEE SHEREHOLDER SERVICE?

UK Nominee Shareholder Service. Why have and what is a Nominee Shareholder? The provision of nominee shareholder services in connection with the formation of a limited company is invariably required by clients seeking legitimate confidentiality of ownership. Nominee Shareholder Service: £100.00 per year.

Coddan provides Nominee Shareholders to serve as proxies for the company owners and to act on their behalf. Our corporate nominees will hold the shares for clients under a legally executed Declaration of Trust. Our fee covers the cost of reasonable handling of official documents, which will be sent via the normal postal service. This does not cover Trade correspondence or the use of express or courier services.

The Nominee will respect the confidentiality of the Company and its Beneficiaries except with regard to UK authorities legally authorised to make proper enquiries. The Nominee will not become involved in the affairs of the Company or take responsibility for contracts or any trade matters.

A nominee shareholder is the registered owner of shares held for the benefit of another person (the beneficial owner). The beneficial owner will normally require the nominee shareholder to execute a declaration of trust in respect of such shares.

The beneficial owner may choose to appoint a nominee because it does not wish to have the shares registered in its own name, or it may be required to appoint a nominee, for example, in the case of a wholly-owned subsidiary that is required by its articles of association to have two shareholders. A nominee shareholder may be an individual or a body corporate.

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Every shareholder may empower a third person (credit institution, professional shareholder representative or other trustee) to execute his voting right at a general assembly. Many shareholders empower their depository banks to execute their voting rights. 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.

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The Nominee relies on the Beneficiaries providing correct, up-to-date information including personal details. The Nominee maintains the right to refuse to sign documents that, in our opinion, may be misleading or unlawful. The Nominee is legally obliged to report evidence that may point to unlawful activity by the Company or the Beneficiary. A single Nominee can only represent a single beneficiary.

Where a company has multiple Beneficiaries requiring nominees each Beneficiary will require a separate Nominee to represent them and vote as their proxy. A contract will be provided for each beneficiary. A renewal invoice is issued each year several weeks before the renewal date. If payment is not received this service will cease and the Nominee will resign.

There are many business structures entrepreneurs can choose from when it comes to setting up a business. Choosing a business structure can be a complicated task, however, the first step is to ascertain the best structure for your business needs. One option is to set-up your business as a registered company, such as a private limited or public company.

Most companies registered in the United Kingdom are private companies and this is also the preferred option for most small businesses. The name of every shareholder of every UK company is recorded in both the company's statutory registers and at Companies House. This information is therefore publicly available.

Some shareholders may require confidentiality for commercial reasons. For example, whilst directors may apply for confidentiality orders to keep their home addresses private, this facility is not available to shareholders. Companies may also wish to keep secret their ownership of development companies, for valid commercial reasons. The name of the nominee shareholder then appears on all public records relating to the shareholding.
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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. 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. A nominee holding occurs where a third party holds shares on your behalf.

This can be purely an administrative matter to aid the management of shareholdings. It is sometimes necessary for the shareholders in a limited company to remain anonymous and appoint nominees to hold their shares incognito. Our nominee becomes the registered holder of the respective shares, and no record of the true beneficiary then exists on the public record. Unless required to do so by the Court, we will not divulge the beneficiary's true identity to any third party without the express consent of the client.

The beneficiary's interest is secured by the execution of a declaration of trust which binds our nominee accordingly, and gives the client full control over any future transfer of benefits derived from the shares in question. If you have any questions please E-Mail or call us: 0800 081 1510 or +44 (0) 207 637 3881, fax: +44 20 7681 3318.

Live Help:
Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours, our business center will be closed. When you click on the button, you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is free! There are no hidden fees. We offer the service as a courtesy to our website visitors.

Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable.

We accept phone orders during normal business hours. Credit cards are the preferred method of payment; we accept VISA, MasterCard and Delta. We can accept payment in UK Pounds Sterling, US Dollars, Euros, Australian Dollars and Canadian Dollars. If you call and receive voicemail, just leave your name and number, as clearly and as possible, and we will call you back as soon as possible.

Monday - Friday: 9:30am to 17:30pm
Saturday: (offices are closed)
Sunday: (offices are closed)
Holidays: (offices are closed on all recognized UK holidays).

Money and Payment Policy: 
Coddan accepts all major currencies. We accept Visa, Visa Electron, Visa Purchasing, JCB, MasterCard, Solo, Switch and Delta. We do NOT charge "surcharges" for credit card transactions. If you do not feel comfortable transmitting your credit card number and other information on the Internet, we suggest you place an order online, choose "Credit Card via Phone" as the payment method, and then phone in to give us your credit card number over the phone. We will charge your credit card manually. Pre-payment with cashier's check or money order is accepted. We accept wire-transfer from anywhere. After you place your order, details about the wire-transfer process will be e-mailed to you on the second e-mail notification. If you missed that e-mail, please call our toll-free number that is given on the order confirmation.

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.

A private company limited by shares (UK LTD) requires for a MINIMUM OF ONE SHAREHOLDER and for the details of shareholders to be put on public record.

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. 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.

English 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 Limited Liability Partnership 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.

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 registering 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.

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.

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.

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.

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.

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.

Declaration of Trust: 
A nominee shareholder will normally execute a dividend mandate requesting all dividends in respect of the nominee shareholding to be paid to the beneficial owner. The nominee will usually also execute a blank stock transfer form in respect of the nominee shareholding so that the nominee shares can easily be transferred, if necessary without the consent of the nominee.

The nominee should execute a declaration of trust to the effect that he holds the nominee shareholding as nominee for the beneficial owner and that he has no beneficial interest in it. The declaration often includes the following undertakings of the nominee: to account to the beneficial owner for all dividends and other distributions received in respect of the nominee shares. To exercise as the beneficial owner directs all voting and other rights and powers vested in the nominee as registered holder of the shares. To transfer the shares as the beneficial owner directs.

The declaration of trust may include a grant of power of attorney to the beneficial owner in respect of the nominee shares. (For information on powers of attorney see Practice note, Powers of Attorney). If a declaration of trust is executed it is not strictly speaking necessary to require the nominee to execute a blank stock transfer form or a dividend mandate. However, it may still be advisable for the beneficial owner to request these from the nominee.

No Notice of Any Trust on Share Register: 
A company may not record notice of any trust, whether express, implied or constructive in its share register (section 360, Companies Act 1985)(1985 Act). Normally the articles of association of the company will include a more general provision that, except as required by law, no person must be recognised as holding shares on trust and the company is not bound by and must not recognise any interest in any share except the absolute right to it in the shareholder. It follows that a company does not look beyond the person named as shareholder in the register. The company is not required to enquire whether any transfer is within the powers of a nominee shareholder and is not liable for registering a transfer which is in breach of trust.

However, despite section 360 of the 1985 Act, public companies are required to keep a register of interests in shares, specifically where the interest amounts to 3% or more of the issued share capital of a given class of shares (see sections 198–220, 1985 Act). For these purposes, a person is taken to have an interest in shares if, not being the registered holder, he is entitled to exercise any right conferred by the holding of the shares or is entitled to control the exercise of any such right (section 208(4)(b), 1985 Act). The purpose of these provisions requiring the disclosure of interests in shares is to enable public companies to discover the identity of beneficial owners of their shares, which is useful in preparing a bid defence strategy.

Companies Requiring Two or More Shareholders: 
Since July 1992 the Companies (Single Member Private Limited Companies) Regulations 1992 (SI 1992/1699) (1992 Regulations) permit private limited companies to be incorporated with one member and existing companies to reduce their membership to one. The 1992 Regulations mean it is no longer necessary for one share to be held by a nominee in wholly-owned private companies. However, wholly-owned private companies may still have nominee shareholders, for example if they have not changed hands since 1992 and have not amended their articles of association to reflect the change in the law.

The 1992 Regulations do not apply to public companies which must have at least two members, so a wholly-owned subsidiary that is a public company will still need a nominee to hold one or more of its shares. Often, the nominee share will be registered in the joint names of a director of the parent company (as the first-named holder) and the parent company (as the second-named holder). (All the other shares of the subsidiary company will be held by the parent company.)