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Stuart
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A nominee shareholder is a shareholder who holds the shares of a company on behalf of the actual owner, and in whose name the shares are registered in the register of the company. For the purpose of privacy some owners do not want to be identified as shareholders and therefore appoint nominee shareholders. The nominee shareholder arrangement is a type of agency relationship, where the nominee acts as an agent on behalf of the actual owner. The nominee shareholder is allowed to act strictly within the limits of the terms of the nominee agreement.
With regard to third parties, the nominee shareholder has the same liability as an ordinary shareholder, although a nominee shareholder has no real liability. Any legal obligation or liability is the obligation of the actual owner and not that of his agent. A nominee shareholder executes a dividend mandate requesting all dividends in respect of the nominee shareholding to be paid to the actual owner.
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