Nominee Shareholders - Valid Trusts Arrangements Or A Mere Façade?

First to be explored is the legal nature of the so called "nominee shareholder". Nominee shareholder is a shareholder of a company holding shares nominally only, that is, only in name. In such a way the identity of the ultimate beneficial owner ("UBO") of the shares is not disclosed. Such arrangements serve corporate and financial privacy and secure anonymity up to a certain extent. The nominee shareholder is said to hold the shares in trust for the UBO of the shares, thus the nominee shareholders are described as "trustees".

The nominee shareholder is considered to be a trustee holding the "numbered" shares in trust for the beneficiary who is the real owner (equitable) of the shares of the company. The nominee shareholder holds the legal title of the shares hence he is the registered shareholder appearing in the register of the company whereas the UBO holds the beneficial title of the shares. A declaration of trust is usually signed by the nominee