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Role of Nominee Directors

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HougangHenry
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Role of Nominee Directors

Postby HougangHenry » Mon, 03 Oct 2016 2:58 pm

Hi,

New to ACRA system. Much appreciate any advice on the role of nominee directors.
Company has one non-resident director (me) and a local director (nominee director).

The director will not sign an MOM application to employ staff, but the form requires someone with a FIN/NRIC so I am not authorised to apply.

What are the duties of local directors in this regard?

With thanks.
HH

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sundaymorningstaple
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Re: Role of Nominee Directors

Postby sundaymorningstaple » Mon, 03 Oct 2016 3:33 pm

I reckon you aren't pay him enough.

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Re: Role of Nominee Directors

Postby PNGMK » Mon, 03 Oct 2016 5:03 pm

A nominee director will not go out of their way without some compensation for the risks involved. You really need a resident exec director these days.
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Strong Eagle
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Re: Role of Nominee Directors

Postby Strong Eagle » Tue, 04 Oct 2016 1:12 am

There is no such thing as a "nominee" director. Any person who is appointed director by the shareholders is a full fledged director with all the rights and responsibilities of a director. In other words, the director could screw you by taking actions you don't want them to take (or, as in your case, refusing to take actions that you do want them to take). You could also screw the director by performing illegal acts such as money laundering or making illegal hires. The director would be criminally and civilly liable for your actions.

It used to be real easy to find people to be "nominee" directors. Not so any more, and probably because a bunch of them got screwed by non-resident directors committing criminal acts. These days, virtually all of the 'rent a director' companies have language similar to the following:

    You can engage our Nominee Director Service under the following conditions:

  • You must appoint at least one foreign individuals shareholder to be the active executive director’s responsibility to run the business.
  • The nominee director is to meet the statutory compliance of a resident director. It is a non- executive position with no financial, operational or management responsibilities of the company. This is completely false. It is not possible for a director to give away statutory responsibilities under the companies act.
  • You must satisfy our “Client Risk Assessment Review” requirements.
  • You must execute our Nominee Director’s Indemnity Agreement.
  • You must use our company secretarial service, corporate annual taxation filing service.
  • You must use our payroll service when you provide employments to hire local employees.
  • You must provide monthly Company’s bank statement to our nominee director’s email address for review by our accountant.
  • Your annual accounts records must be subject to auditing
  • You can maintain Singapore Bank Account in the Company.
  • The opening of one foreign bank account overseas is subject to Board Resolutions approved by all directors.


Bottom line: If you are engaging in legitimate hiring of employees, you need to find another director, one who understands your business and is willing to do what you want to have done.

Both you and your director protect yourself by having undated, signed letters of resignation. This won't always work but if your director tries to pull a fast one, you can fill in the date and present a letter saying he had no legal authority to do so.


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