Nominee Shareholders: Declaration of Trust (Basic Agreement)

This Nominee Shareholders: Declaration of Trust (Basic Agreement) is for use where a nominee shareholder (the registered owner of shares) holds shares for the benefit of another person (the beneficial owner).

A beneficial owner may choose to appoint a nominee because it does not want its name to appear on the register of members, or it may be required to appoint a nominee (for example, under the company’s articles of association). A nominee can be an individual or a body corporate.

A company will not record details of any trust arrangement on its register of members. As far as the company is concerned, the person named in the register of members is the registered shareholder. The beneficial owner will therefore often want the nominee to execute a declaration of trust to document the terms on which the shares are held.

What does Nominee Shareholders: Declaration of Trust (Basic Agreement) do?

It documents the trust arrangement under which the nominee holds shares as registered shareholder for the benefit of the beneficial owner.

What does Nominee Shareholders: Declaration of Trust (Basic Agreement) cover?

• A simple declaration of trust covering shares in a company and basic nominee arrangements.
• Confirmation of the nominee’s registered ownership and the beneficial owner’s beneficial interest.
• The core terms on which the nominee holds the shares for the beneficial owner.

When should you use Nominee Shareholders: Declaration of Trust (Basic Agreement)?

• Shares are registered in the name of a nominee, but another person is the beneficial owner.
• The beneficial owner wants a written record of the terms on which the nominee holds the shares.
• You need a basic declaration of trust dealing only with shares (rather than a longer form agreement covering securities and a broader set of obligations).

Background

Since 6 April 2016, most UK companies have been required to identify and record people with significant control (PSCs), including those who own or control (directly or indirectly) more than 25% of the company. This template has been updated to take account of the PSC regime.

Nominee arrangements may still be used. However, depending on the level of shareholding and the reasons for the arrangement, the beneficial owner’s details may still be caught by the PSC regime. The PSC regime looks behind legal ownership structure, and independent legal advice may need to be obtained.

Helpful resources

For more detail on PSCs, see Register of People with Significant Control.

Nominee Shareholders: Declaration of Trust (Basic Agreement) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.