Nominee Shareholder in the UK
- A nominee shareholder is someone (an individual or a company) who is registered on the company’s share register as the legal owner of the shares, but holds them on trust for the beneficial owner (the real owner).
- The relationship is usually governed by a Declaration of Trust (or similar agreement) stating that the nominee has no beneficial interest, and will act according to the beneficial owner’s instructions (e.g. on voting, dividends).
Risks / Practical Considerations
- Voting / Corporate Rights: While the nominee is the registered member, in practice they may vote only per the beneficial owner’s instructions.
- Transparency: Nominee holdings do not necessarily guarantee full anonymity, especially for significant shareholders (due to “people with significant control” rules).
- Brokerage / Nominee Accounts: In practice, many retail investors’ shares (e.g. through brokers) are held in pooled nominee accounts.
- Liability: Under certain circumstances, if the nominee fails to pay calls on partly paid shares, others (like directors) may be liable.
Nominee Directors in the UK?
UK law does not prohibit appointing someone as a director whose role is to act on behalf of, or at the instruction of, someone else.
However:
- A nominee director is still a director in law.
- They owe full legal duties to the company — not to the person who nominated them.
- They may be personally liable for breaches.
This means they cannot simply obey instructions from the beneficial owner if those instructions conflict with the interests of the company.
A nominee director is not a puppet under UK law — even if they are appointed to represent someone else.
Summary
| Issue | Nominee Shareholder | Nominee Director |
| Legal? | Yes | Yes |
| Duties owed? | None beyond trust agreement | Full statutory director duties |
| Can simply follow instructions? | Usually yes | No, must act independently |
| PSC implications | May require PSC disclosure | Cannot hide a controller |
| Liability | Low | High |
What we can do for you:
- For nominee shareholders: a written Declaration of Trust and advice on how PSC rules apply.
- For nominee directors: an agreement to 1) confirm that the nominee acts per instructions as far as allowed by law; and 2) indemnity
