Who is a Nominee Director?
A Nominee Director is an individual who acts as a company's director for the purpose of fulfilling the legal requirement to have a director and perhaps to protect the identities of the persons actually controlling the company. A Nominee Director is intended to facilitate the beneficial owner in matters of privacy. In certain jurisdictions there is a requirement to identify on the public record the details of the entity's directors. In such cases the benefits of anonymity can only be achieved through the use of third party professional director. By using a "Nominee" the names of the entity's beneficial owners are neither on the record nor disclosed to any third party.
The reasoning behind nominee services is to protect the identity of the client, ensuing discretion and anonymity. The motive of using nominee services is so that the nominee person(s) appears in the corporate documents other than the beneficial owner of the Company. However nominees have no control over the company and are not entitled to manage. A nominee is a person who takes a superficial interest in the Company's business and is basically there to sign documents accepting appointments.
Why could someone need a Nominee service for the Business needs?
There are two reasons for going for this service, they are:
- Ø An individual who does not want to disclose their identity as an owner of an organization.
- Ø Individuals who does not have SSN (Social Security Number) and want an EIN, as it is mandatory to use SSN in the application.
- Ø Nominee Service only to obtain an EIN:
Nominee service EIN is designed only for the purpose obtaining the Federal Tax ID number with an agreement between the two parties. The Nominee's SSN will be used on the application to obtain EIN and once EIN is received, the nominee will resign and the beneficiary/owner will take over the entity. Nominee service EIN is provided to Corporation, LLC, Partnership and sole-proprietors who plan to have employees. This service is not available for LLC's or S-Corporations which are taxed as partnerships or as an individual.
Responsibilities & Liabilities of Nominee
- Such directors are in name only and have no other responsibilities and powers.
- Nominee Director(s) are not responsible for and will not make any decisions whatsoever in connection with the management of an entity.
- Nominee Director(s) will not be identified and or sign any documents and or returns on behalf of the entity.
- The beneficial owner is fully responsible, financial, legally and in all other respects for the operation of the entity.
- The nominee director will sign the resignation letter at the time of appointment itself.
- The nominee will not have any liabilities as such as he will neither be signing any contract on behalf of the company nor signing up for obtaining a Bank Account.
- Once the Nominee resigns from the Board of Directors, the owner of the company can take complete charge of the company
ICS, Inc. - the makers of http://www.mybizfiler.com/ does provide Nominee Services and a representative as Nominee Director. Kindly visit our website or write to email@example.com for more details.
ICS, Inc (www.mybizfiler.com) offers a wide range of services typically offered by a Big 5 Accounting firm and a CPA firm in the U.S. ICS offers Incorporation, Book Keeping, Payroll Services, HR & Business Consulting etc. Contact ICS today at 203 437 4083 , e-mail - firstname.lastname@example.org, or by accessing 24/7 chat page on http://www.mybizfiler.com/.
Disclaimer: ICS does not offer legal services or legal advice, but only generic information on legal subjects. ICS is not an attorney or law firm and not a substitute for an attorney or law firm