A nominee director is generally an official registered intermediary who acts as a business owner in a particular organization. These directors are often employed by government agencies and other organizations. They are also authorized to carry out the business duties of the owners of the company under their purview. This usually means that they have to be members of the board or at least appointed by the board if they have been hired for that purpose. This is quite legally acceptable and many businesses in various Jurisdictions utilize them for various purposes. In some jurisdictions, the names of nominated company directors are published on the official public record. Others still keep it confidential and only select people are aware of the nature of their role in a particular company.

 

The nominee directors are generally selected to replace the company’s directors. It is for the nominee directors to review all the corporate documents of the company and to evaluate their suitability to the company. This can be carried out by a panel meeting, where all the directors are present. After this, the board will discuss the case with the nominated directors and if the situation justifies it, the directors may be asked to replace their former employers. When the case does not warrant the replacement, the original board will appoint the new directors.

Sometimes nomination directors may be required to have certain credentials which should be verified before they are asked to take on the task of replacing a director. In this case, they will have to submit their credentials in writing and they will be required to attend a board meeting to prove the legitimacy of their credentials. At times, the qualifications may differ from one jurisdiction to another.

Resource: https://www.cfoacc.com.sg/services/nominee-director

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