HERE
IS WHAT YOU NEED TO KNOW ABOUT A NOMINEE COMPANY
A company nominee, also known as a nominee director, is an individual or a company, that holds shares in a company on behalf of the true or beneficial owner. There is no explicit provision under Kenyan law on nominee directors. Thus, the default position is to treat their duties as synonymous with those of general directors, to wit; duty to exercise reasonable care and skill and duty to avoid conflict of interest. However, given that in the end, the duty of a nominee director is to take care of the interests of the beneficial owner, the individual or the entity has to balance this with the interest of the company.
Why use a nominee company?
A company nominee is a great way of taking advantage of certain tax incentives within a corporate group. In Kenya, there has been an increasing trend of mergers with the goal being to principally increase the shareholding value of the companies through increase in the number of subsidiaries. Even so, the legal principle is that subsidiaries are to be treated as separate legal entities. Nominee directorship can be great way to take advantage of the tax exemption regime offered in the Export Processing Zone Act, where the parent company is incorporated aboard. Secondly, a nominee director is a great way to keep company information away from public records, desirable for sticklers for discretion and other high profile individuals. This is perfectly legal and legitimate. Thirdly, nominee directors help reduce administrative duties associated with running a company such as paper work. Lastly, nominee directorship provide an extra layer of protection to assets from creditors and lenders, especially when they the company is incorporated as a subsidiary company.
What do you need to provide
All you need is beneficial owner’s contact details and the number of shares the beneficial owner wishes to allocate.
Note
Given the legal and tax implications involved, it is important to seek professional advice before setting up a nominee company. If you need further clarification on this article, please contact us on admin@obore-advocates.com
Email: admin@obore-advocates.com