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The Companies Law and the Common Law both outline a set of statutory and fiduciary obligations for directors of Cayman Islands companies. When taking up the management of a firm, a director should be completely aware of their obligations and liabilities. A person who can also serve as the business's shareholder and director may incorporate a legal entity in the Cayman Islands, according to the company law.
But what if you want to form your offshore company in the Cayman Islands but want to hide your identity? Read this article to understand the solutions that you have at your disposal to hide your real name and real address.
In this blog post, we will cover the following topics:
- Who is a Nominee Director?
- Who is a Nominee Shareholder?
- Power of Attorney vs Declaration of Trust
- How to choose the best Nominee
- Benefits of appointing a Nominee
- Frequently Asked Questions (FAQs)
Who is a Nominee Director?
In essence, the nominee director is a third party whose name will appear on the company's foundation paperwork as well as in documents submitted to the Registrar of Companies that are made public. The nominee's relationship to the beneficial owner is one of a fiduciary. A nominated director is given responsibility for overseeing the daily operations of the company purely on the owner's instructions. Your information won't be disclosed on government or company records if you choose the Nominee Director, and you can maintain complete control of your business thanks to the Power of Attorney (POA).
Who is a Nominee Shareholder?
The Nominee Shareholder will represent you in your company in the same capacity as a Nominee Director. Your information won't be made public on paperwork from the government or the business. The Declaration of Trust (DOT) is the document that binds you and the Nominee Shareholder.
The nominee shareholder is chosen to hold shares on the firm owner's behalf, although they are not legally his or hers. Its major goal is to protect the beneficial owner's anonymity. The nominated shareholder will engage in a declaration of trust with the company owner, which forbids him or her from exercising voting rights or dealing with shares without the knowledge of the firm's beneficial owner.
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Power of Attorney vs Declaration of Trust
Power of Attorney is generally used to appoint a nominee director for your company whereas Declaration of Trust is an agreement used to appoint a nominee shareholder for your company.
In accordance with a Power of Attorney (POA), the Nominee Director will represent or act on your behalf in your company. The proposed director won't be involved in any of your company's operating tasks.
A Declaration of Trust (DOT) is a legal document that appoints a Nominee Shareholder to hold your company shares on your behalf while identifying you as the true owner and the exclusive possessor of those shares.
How to choose the best nominee director and nominee shareholder for your company in the Cayman Islands?
Should respect your privacy:
The utmost secrecy regarding the real owners of the organisation should be prioritised by a nominated shareholder and director. To protect your privacy and advance your interests, they must be reliable and refrain from sharing private information.
Superior level of integrity:
Look for candidates who uphold a high level of morality and honesty. A person with high moral standards makes sure they act in the company's best interests, creating transparency and a productive work atmosphere.
Favorable agreement terms:
The nominee agreement's conditions must be reasonable and advantageous to both parties. Make sure the contract clearly and fairly describes the nominee's obligations and compensation. This will lay the groundwork for a partnership that benefits both parties.
Experience and expertise:
Select candidates who have a plethora of knowledge and experience in the pertinent field or industry. A candidate who has experience leading similar roles can offer insightful advice and support that will help your Cayman Islands firm run smoothly and expand.
A successful and legal offshore business operation in the Cayman Islands depends on choosing the appropriate nominee shareholder and nominee director with these criteria.
Vepapu addresses all of the aforementioned concerns and establishes itself as the greatest and most reliable partner in your offshore company journey in the Cayman Islands, ensuring that it is completely hassle-free and easy for you.
Benefits of appointing a Nominee Director and Nominee Shareholder for your offshore company in the Cayman Islands
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Identity Protection:
Your personal information, such as your passport number, name, and address, can be protected from being revealed in government documents and public records by appointing nominee directors and shareholders. Your privacy in the business environment of the Cayman Islands is improved and the risk of identity-related problems is reduced.
Confidentiality:
Your sensitive information is protected from unauthorised access or disclosure by nominee services, which uphold strict secrecy within the corporate structure and government records. An atmosphere of security and discretion is fostered by this additional layer of confidentiality.
Full Control:
Through legally enforceable papers like a Power of Attorney (POA) and a Declaration of Trust (DOT), you maintain complete control over the operations of your firm even while nominee directors and shareholders are used. This gives you the ability to manage operations and make crucial business choices while enjoying the privacy and security provided by the nominees.
Frequently Asked Questions (FAQs)
Is there a public directory available in the Cayman Islands?
No, there is no publicly available information or directory in the Cayman Islands. But with the help of the Nominee Director and Nominee Shareholder, you will be able to remain anonymous on the company's paperwork, and with the government's record, you will only be recognised as the Beneficial Owner of the business.
What are the documents required to appoint a nominee director and/or nominee shareholder for your company in the Cayman Islands?
Documents requirement is simple and straightforward. Proof of all directors' residence addresses and passport copies are mandatorily required. You would also need to produce your Company's documentation, such as the Certificate of Incorporation, M&AA, Registered of Director/Shareholder, etc., if the director is another corporation.
What do you mean by a nominated director in the Cayman Islands having fiduciary obligations?
A director's fiduciary obligations include acting in good faith, with a legitimate objective, and not for personal gain. They have a duty of confidentiality and must steer clear of disputes with other human beings or entities. Directors must not abuse corporate resources, transfer them to outside parties, or go beyond their scope of responsibility. They must behave in a way that advances the success of the company and refrain from actions that might enable them to make unreported gains. The majority of the authority given to a company director is contained in the articles of association. A corporation director is also held to a responsibility of care, expertise, and diligence.
Is it legal to use nominee director and nominee shareholder in the Cayman Islands?
Yes, it is 100% legal to employ a nominee service, and doing so is extremely frequent when you need to maintain your anonymity from the general public or adhere to local legal requirements. Everyone who wants to conceal their true identities uses it as a common approach.
Do the nominee directors and nominee shareholders interfere in your company's operations?
The interests of both parties are safeguarded by the correct execution of a nominee service agreement (also known as Power of Attorney) between the nominee and the business owner. Nominated directors and shareholders solely carry out the owner's instructions and do not take part in corporate management. It is highly recommended to use a very professional nominee service, like Vepapu.
