Declaration of Trust for Nominee Shareholders (Long )

This Declaration of Trust (Nominee Agreement) should be used where a nominee shareholder (as 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 as part of a company’s shareholding arrangements because it does not wish its name to appear on the share register, or it may be required to appoint a nominee (for example, by the company’s articles of association).

How the arrangement sits with the register of members

A company will not record details of any trust arrangement on its share register (register of members). As far as the company is concerned, the person named in the company’s share register 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 nominee holds the shares.

A nominee can be either an individual or a body corporate.

PSC regime considerations

Since 6th April 2016, most UK companies are required to identify and record the people with significant control over them (PSCs). This includes those who own or control (directly or indirectly) more than 25% of the company.

Further details are available here. This template has been updated to take account of the PSC regime.

Notwithstanding the PSC regime, nominee arrangements may still be used. However, depending on the level of shareholding concerned and the reason(s) for putting the arrangement in place, whilst the beneficial owner’s details will not be recorded on the company’s register of members, it may be caught by the PSC regime.

The PSC regime looks behind the legal ownership structure. Independent legal advice may need to be obtained.

Scope of this long form declaration and alternative basic agreement

This is a long form declaration of trust which covers both shares in a company and other securities (including options and warrants) that may also be held on trust by the nominee.

In addition to the declaration of trust provisions, it includes a long form list of undertakings between the nominee and beneficial owner in relation to the securities.

For a more basic agreement, please see Nominee Shareholders: Declaration of Trust – Basic Agreement.

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