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This Declaration of Trust - Nominee Shareholders shall be used where shares in a company are registered in the name of a nominee shareholder but held for the benefit of another person, the beneficial owner.
Under a Declaration of Trust - Nominee Shareholders the nominee shares are held by the nominee shareholder on trust for the beneficial owner and the nominee has no beneficial interest in those shares. A nominee arrangement gives rise to a bare trust over the shares, under a bare trust the nominee has no discretion over the assets subject to the trust.
This Declaration of Trust - Nominee Shareholders shall be used where shares in a company are registered in the name of a nominee shareholder but held for the benefit of another person, the beneficial owner.
Under a Declaration of Trust - Nominee Shareholders the nominee shares are held by the nominee shareholder on trust for the beneficial owner and the nominee has no beneficial interest in those shares. A nominee arrangement gives rise to a bare trust over the shares, under a bare trust the nominee has no discretion over the assets subject to the trust.
Please note that a nominee shareholder can be an individual or a company and, it is also possible to have more than one nominee holding legal title to shares jointly. Also, the beneficial owner of the shares can either be a company or an individual.
There are several reasons why nominee shareholders are used, the main reason is privacy. Where a nominee arrangement is in place privacy relating to the beneficial owner interest in the shares is maintained as only the person named as shareholder appears on the company’s register of members. As the company considers the nominee shareholder entitled to all the benefits and to exercise all the rights attaching to the shares a declaration of trust is required in order to set out the terms upon which the nominee holds the shares and upon which the beneficial owner controls the way in which the nominee exercises the rights attached to the shares.
Please note that from January 2016 under the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015) all UK companies (other than publicly traded companies) are required to keep a register of people with significant control (PSC) over the company and to make that register public.
An individual with significant control will meet at least one of the following five conditions:
Consequently the “register of people with significant control”, also known as the “PSC register,” must contain information on individuals who ultimately own or control more than 25% of a company’s shares or voting rights, or who otherwise exercise control over the company and its management.
A company’s PSC register must be available for public inspection and is searchable online via Companies House.
The requirement to maintain a PSC register applies to all UK private and public companies, other than those publicly traded companies. Therefore, both private and unlisted public companies with nominee shareholders may need to record details of the beneficial owner under the nominee arrangement in their PSC register.
This Declaration of Trust - Nominee Shareholders Template contains a number of undertakings from the nominee shareholder ensuring that the beneficial owner obtains the benefits conferred by the shares and is able to control the rights attached to the shares. Under these undertakings the nominee shareholder will have to account to the beneficial owner for all dividends and other distributions received in respect of the nominee shares; follow the directions of the beneficial owner in exercising all voting rights and powers vested in the nominee; and transfer the shares in accordance with the beneficial owner's directions.
This Declaration of Trust – Nominee Shareholders is in Microsoft Word format, written in plain English easy to use and edit.
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