Is appointing a nominee director legal? Does it have any benefits for the company? While nominee director services come with salient benefits, first let us understand why you would need one. If you are trying to register your company in Singapore, you will need a nominee director. This person needs to be a resident or citizenship holder of the country. The market is highly competitive, and the existing big players in the Singapore business landscape are opting for nominee business director services rather than closing shop. As per the Singapore Companies Act 2017, it has now become mandatory for all companies operating in and out of Singapore to have a local director.
Why would you need nominee director services in Singapore?
In fact, there are a few more reasons you might want to consider hiring these professional services. There are times when entrepreneurs have multiple business engagements, and they want to keep their names off the overseas corporations. Once you appoint a nominee director, his or her name will go to the official records and your involvement with the corporation will remain private. Comprehensive nominee director and secretarial services are of great help when you want to make new investments in foreign trade or overseas corporations without making it a part of the public record. When you approach a reputed service provider for this purpose, they ensure that the process is entirely legal. To understand the nuances of the anonymous ownership of a limited corporation visit Director Plus – Nominee Director Services Package.
While registering a limited company, you will face several challenges and necessities that only a nominee director can fulfill. This process maintains the secrecy about the rightful owner of the company, but at the same time, the power of decision making resides with the actual owner. The real owner also reserves the right to access bank accounts and manage the finances. The nominee director is in charge of managing business operations and representing the owner(s) during bank meetings, but he or she must comply with the decision of the board of directors of the company at all times. It is also the nominee's responsibility to maintain proper communication irrespective of geographic distance or time difference. He or she must always intimate you with new rules, government regulations, compliance issues and upcoming challenges.
Why is it necessary for an entrepreneur to find a nominee service that has experience and reputation?
Although a nominee director has limited power in the company, a wrong choice can cost your limited overseas corporation thousands (or even millions, depending upon the size of operations) since he or she will be the public face of your company. The company you are working with should be able to understand and accept the responsibilities of your business. The duties of a nominee are the same as that of the other director. They must uphold the best interest of the institution at all times. In fact, they should not offer preferential treatment to their nominator(s). They have to report the general performance of the company to their appointors.
A severe conflict of interest arises in the unfortunate event of insolvency. When a corporation enters the state of bankruptcy, the nominee directors should think about the best interest of the company, which does not lie in selling the assets or dissolving the estate. Yet, it is in the best interest of the owner to sell the assets to minimize or at least restrict the losses of the company. It is their fiduciary duty to resolve this conflict so as not to violate trade and commerce laws, and at the same time safeguard the interest of the owners. That is why the hiring company should look into their policies to avoid such conflicts. These protocols should also describe the responsibilities and rights of potential nominee directors in the future.
Working with professional nominee services can help you find smart and economic solutions to such problems. Since they have dedicated legal teams that tackle conflicting policies and laws on a regular basis, finding resolutions is much easier than working with novices, who have just entered the market.
What are some additional benefits of nominee director services?
The nominee director and secretarial services bring many benefits and additional services to the table. These include dedicated accounting and taxation services. The Singapore tax laws dictate that all companies must submit the Estimated Chargeable Income (ECI) within the first three months from the end of a financial year. The authority uses the ECI to raise an estimated tax assessment for the company in question. The company owners are liable to pay the tax within one month from the date of release of the tax assessment or raise an objection to the amount. If you want to object to the estimated tax amount, you must put forth clear reasons for the disapproval.
With an expert taxation service, you will be able to receive a timely analysis of the company accounts. At the same time, you will be able to push necessary paperwork for objection or tax assessment before the deadlines. That will not only help you stay compliant with the national companies act; it will also help you save a lot of money and energy that you would otherwise spend running between the offices. In fact, a company can expect 24/7/365 tax advice from their dedicated nominee and secretarial services.
It is time to make up your mind!
All enterprises in Singapore need to appoint a secretary within the first six months of establishment. Finding a dedicated secretary and a director, who are also residents of the country is impossible. Additionally, creating a new job, conducting interviews, arranging for training programs and providing monthly remuneration complete with employee benefits can cost a company significantly. The only smart option here is to opt for the services of vendors, which deliver exceptionally trained and experienced individuals, who have a thorough understanding of the business compliance. The cost-effectiveness, prompt response time, legal troubleshooting and added tax consultancy benefits are enough reasons for you to consider professional nominee director services.
