Some businesses may require a nominee director for a variety of reasons. For foreign-owned companies, they may require a nominee director to fulfil statutory requirements of having one local resident director. Some individuals may be employed in certain companies that prohibit them from being a director in another company. These individuals may want to set up the company proper before tendering their resignation to their current employers.
A nominee director still has responsibilities which can be rather burdensome. The nominee director would be responsible for paying company charges like liquidation fees in the event that the beneficial owner becomes uncontactable. This is the reason for the security deposit fee that comes with the nominee director service. This security deposit fee is refundable upon termination of the nominee director service.
There will be a nominee director agreement to clearly state the business relationship between the beneficial owner and the nominee director. The nominee director will be indemnified by the business owner on all liabilities. Periodic copies of the bank account statements of the company have to be given to the nominee director.
The right nominee director must have good financial standing and not be involved in any legal lawsuits against him or her. The reason for this is that you need the nominee director to be eligible to run the company for you. If the nominee director is facing financial duress, he or she may not be eligible to take up the post of a nominee director of the company. The nominee director agreement must also appropriately protect your interest as the beneficial owner of the company. The nominee director is essentially still a director of the company and he or she is still able to make certain changes to the company if there are no appropriate checks and balances. For foreign clients, we will get the client to sit on the board as a director together with the nominee director. We would usually recommend having two directors from the client to sit together with the nominee director on the company’s board. This is so that the nominee director will not have absolute power to make changes to the company without the other directors’ approval.
The nominee director position is an extremely sensitive one. This is why you should always get proper advice on how to employ a nominee director for your company. Our firm specialises in drawing up nominee director agreements and we will maintain the business relationship between the nominee director and the client. We have a list of qualified nominee directors who can fulfil the position of nominee directors for a wide array of clients.
Here are the usual fees for nominee director services:
Nominee Director Fees: $200 per month (paid quarterly) or $2,000 per annum (paid annually)
Nominee Director Security Deposit: $3,000
Nominee Director Agreement: Free if you are using our agreement. If you would like to have one specifically drafted, we will refer the matter to our legal representatives and they will quote you separately.
This pricing is for start-ups and small companies with a turnover of less than SGD$1 million. We reserve the right to revise our prices if we perceive the risk level of undertaking the nominee director position to be higher then normal.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
Yours Sincerely,
The editorial team at Acra Filing Agent
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