Nominee Services - Role and Responsibilities
- Posted by admin
- 18 September 2012
- Company Secretarial
In Singapore, a Company needs to have at least one local Director who is an ordinarily resident in Singapore. Further, there is no concept of Corporate Directors. Overseas entrepreneurs looking to set up companies in Singapore will be at a slight disadvantage on the above rule. However, it would be in their best interest to hire a Nominee Director (‘Nominee’) to meet the requirements for Company set up.
In most cases, the Nominee does not participate in the running of the Company, hence the role is regarded as non-executive, but not independent. However, the Nominee is fully clothed with all the duties and obligations of a Director which in turn gives rise to a dual duty owed by the Nominee (to the Company and client appointing the Nominee).
The Nominee may be a in a difficult situation if the duties are in conflict with one another. When this occurs, the Nominee may act in the interest of and disclose information to his client, or the extent of involvement of the Nominee in the Company. The Nominee Director biggest dilemma would be balancing his duties and obligations to his client with that of fiduciary duties that ties him as a Director. As such, the Nominee must be aware of the potential liabilities that facing him. This is made more onerous with the increasing penalties for breaches in fiduciary duties and filing requirements.
At Sandhurst, we are well aware of the rights, duties and obligations of a locally appointed Director. We shall provide our Nominee services if the following conditions are met:-
• For statutory compliance only.
• Nominee is not involved in the financial, management or operational matters of the Company.
• Meet our Know Your Client procedures
• Execute our Nominee Indemnity Agreement.
A refundable security deposit is required for the provision of our Nominee services. The Security Deposit is held for the duration of the Nominee service and will be refunded to upon termination of the Nominee service.