A nominee shareholder is an unrelated third party, who is officially registered as the holder of shares in a company. The purpose of the nominee shareholder is to uphold client secrecy by shielding the actual owner of the company from being publicly associated with that particular company. In a nominee shareholder situation, a confidential legal document (a declaration of trust, a deed of transfer, a nominee services agreement or another similar document) would be issued by the nominee and held by the beneficial owner. Such confidential document would evidence the actual state of affairs – namely, that the shares are only held by the nominee for and on behalf of the beneficial owner, and that only the beneficial owner has the right to dispose of those shares and is entitled to all benefits and profits deriving from those shares.
Nominee shareholdings are commonly provided by BuyCompany.com to their client companies as an optional service.