Who is a Nominee Shareholder?
A Nominee Shareholder is a person or registered entity who/which holds company shares for another person/entity, holding those assets of values for the real beneficial owners, without themselves having any beneficial ownership rights to those shares. The purpose of creating or having a nominee shareholder on company records is to shield the identity of the real beneficial owners of those shares. In cases like these, the Nominee Shareholder on a company’s corporate record does not own the shares that bear their name–they hold the same for the beneficial owner who has the beneficial interest in them. It is the beneficial owners that nominate the Nominee Shareholder to hold those shares on their behalf.
Shareholder Requirements in Nigeria
Under Nigerian law, every company being incorporated in Nigeria is expected to have a minimum of one shareholder. That shareholder can be a Nigeria resident/citizen or it can be a foreigner or foreign entity. In cases where a foreign entity is to be the shareholder, the minimum share capital the company is expected to have is NGN ten million.
Need for Nominee Shareholder
The major reason why beneficial owners of shares in companies appoint Nominee Shareholders is for them to be able to maintain anonymity and not have their names and details be displayed on public records. Many beneficial owners would rather keep their identities secret and not disclose their shareholding in (some/the) companies where they own shares, and in order to be able to do that, they have to appoint Nominee Shareholders to hold those shares on their behalf, attend Annual General Meetings on their behalf, and vote on company issues on their behalf while they control the actions of the Nominee Shareholder.
In other instances, foreign-owned companies register companies in Nigeria in order to operate in Nigeria and upon incorporation, would sometimes require local participation in their shareholding. At other times, they would rather have a Nigerian nominee shareholder hold shares for them while they retain beneficial interest/ownership in those shares–this they do in order to hold shares as they wish without having to deal with minimum share capital requirements expected of them by Law.
How We can Help by Providing Nominee Shareholders for You
At Kabbiz Global Nominees Limited, we literally breathe our name “Nominees”, as we were primarily conceived to assist HNIs and corporate entities seeking to purchase shares within Nigerian companies buy and hold their shares on their behalf with the utmost confidentiality, while carrying out the instructions of our beneficial owners in relation to the shares we hold as Nominee Shareholder on their behalf. We are also very careful to provide an audit trail of the shares in order to prove (your) beneficial ownership in respect thereof if and when the need arises so that there is no arguments as to your beneficial ownership of your shares.
When Can we be Appointed as Nominee Shareholders?
At the point of incorporation of their companies, many foreigners and foreign entities do not understand the regulations and requirements of Nigeria, so at that point, we can be appointed as nominee shareholders to hold the first shares of the newly conceived entity so we become its shareholder (on your behalf) at the point of incorporation. We act as your nominees for as long as you want us to, and thereafter transfer your shares to you upon written request to do so.
Our Nominee Shareholders Service for Beneficial Owners
- At Kabbiz Global Nominees Limited, we can act as your nominee shareholders upon your incorporation of your Nigerian company–in other words we become the first subscribers to your company shares, holding the same on your behalf at the point of incorporation.
- We sign an extensive Declaration of Trust with each of our clients, which clearly spells out that Kabbiz Global Nominees Limited will be holding shares for the (actual) beneficial owners.
- We are not the legal owners of your shares. We merely hold them as Nominees on the corporate records with the Corporate Affairs Commission in Nigeria.
- We act as your proxy and carry out your instructions regarding attending Annual General Meetings of the company where we hold the shares for you and vote at these meetings in line with your delivered instructions on the issues to be voted on.
- We will transfer back your shares to you immediately upon request, part of or all your shares which we hold for you as your Nominee Shareholder.
- All income, capital appreciations, dividend payouts, et cetera, in respect of the shares, belong to the beneficial owner of the shares, not us. All will be remitted to the beneficial owner upon request, or as agreed in our Engagement Contract.
- We retain no discretion regarding how to act in respect of the shares.
- We will provide you with a signed (but undated) share transfer agreement (if you wish) and the Declaration of Trust we hold for you will entitle you to transfer the shares back to yourself anytime you wish to, even without recourse to us and without our consent. The shares belong to you, after all, and you are the beneficial owner of the shares.
What our Nominee Shareholder Service covers
We are experts and we will handle all aspects of the Nominee Service for you, including drafting all necessary legal agreements, effecting a share transfer if and when required, and filing necessary returns with the Corporate Affairs Commission. This service entails you paying a one-off service set-up fee and annual charge for the service. We will be happy to provide you with a quote upon your inquiry about our nominee shareholder services in Nigeria. Please note that we undertake comprehensive due diligence checks before providing this service and require identification documents of our beneficial owners beforehand.
For more information, or to make enquiries about our nominee shareholder service, please reach out to us at [email protected]