Nominee Shareholders: Declaration of Trust (Long Form Agreement)

This Nominee Shareholders: Declaration of Trust (Long Form 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 securities are held.

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

It documents the trust arrangement under which the nominee holds shares (and other securities, where relevant) as registered holder for the benefit of the beneficial owner, together with a more detailed set of undertakings between the parties.

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

• A long form declaration of trust for shares in a company and other securities (for example, options and warrants) held by a nominee for a beneficial owner.
• Confirmation of the nominee’s registered holding and the beneficial owner’s beneficial interest.
• A detailed list of undertakings between the nominee and beneficial owner in relation to the securities.

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

• Shares are registered in the name of a nominee, but another person is the beneficial owner, and you want a detailed agreement documenting the arrangement.
• The nominee is also holding other securities (such as options or warrants) on trust and you want these covered in the same agreement.
• You want a longer form set of undertakings governing the relationship between nominee and beneficial owner.

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.

Choose the right version

If you only need a simple declaration of trust covering shares in a company, see Nominee Shareholders: Declaration of Trust (Basic Agreement).

Helpful resources

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

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