A nominee is a person or entity who is named to act on another person's behalf. In the context of investing and trading, a nominee is typically used to hold securities in street name on behalf of the beneficial owner. The beneficial owner is the person who actually owns the securities, while the nominee is the one who is named on the account and holds the securities.
There are a few reasons why an investor might choose to use a nominee. One is to anonymous - the investor's name is not attached to the account, which can be important for privacy reasons. Another is to simplify the process of buying and selling securities - the investor can just instruct the nominee to buy or sell, without having to go through the process of transferring the securities themselves.
It's important to note that the nominee is not the owner of the securities - they are simply holding them on behalf of the beneficial owner. The beneficial owner has the ultimate rights to the securities, and can instruct the nominee to sell or transfer them at any time.
What is the difference between a nominee and a custodian?
A nominee is an individual or organization that is named by another person or organization to act on their behalf. A custodian is an individual or organization that is responsible for the safekeeping of assets on behalf of another person or organization.
What is nominee share account?
A nominee share account is an account held by a nominee on behalf of the beneficial owner of the shares. The beneficial owner is the person who ultimately owns the shares, while the nominee is the person who holds the shares on their behalf. The nominee share account allows the beneficial owner to trade the shares without having to go through the process of transferring the ownership of the shares themselves.
What is a nominee structure?
A nominee structure is a type of company or partnership arrangement in which a person or entity (the "nominee") is nominated to hold shares or interests on behalf of another person or entity (the "beneficial owner"). The beneficial owner is the real owner of the shares or interests, but their name does not appear on the company's register of shareholders or members.
The nominee may be a professional nominee service provider, or may be another company or individual nominated by the beneficial owner. The nominee will usually have a fiduciary duty to the beneficial owner, and will be required to follow the instructions of the beneficial owner in relation to the shares or interests.
The use of a nominee structure can have a number of advantages, including:
- It can allow the beneficial owner to maintain confidentiality over their ownership of the shares or interests.
- It can allow the beneficial owner to avoid certain legal and regulatory requirements that would otherwise apply if they were the registered owner of the shares or interests.
- It can allow the beneficial owner to avoid having their name appearing on a public register of shareholders or members.
- It can allow the beneficial owner to avoid certain tax consequences that would otherwise apply if they were the registered owner of the shares or interests.
However, the use of a nominee structure can also have a number of disadvantages, including:
- The nominee may not be able to make decisions in the best interests of the beneficial owner, and may instead be required to follow the instructions of the beneficial owner.
- The nominee may not have the same level of knowledge and expertise as the beneficial owner, and may therefore make decisions that are not in the best interests of the beneficial owner.
- The use of a nominee structure can complicate the ownership and control of the shares or interests, and may make it more difficult for the beneficial owner to sell or transfer their interest in the shares or interests.
Who is nominee in bank account? A nominee account is an account held by a broker or other financial institution on behalf of a client. The account may be used to hold securities or other assets, and may be held in the name of the broker or other financial institution, or in the name of the client. The account may be used for trading or other purposes.
What is a nominee in business? A nominee is an individual or corporation that is designated to act on behalf of another party in a business transaction. The nominee may be used to hold stock, sign documents, or fulfill other contractual obligations on behalf of the other party. In some cases, the nominee may be a government official or a representative of a government agency.