Setting up a company in the United Kingdom is a popular choice for both domestic and international entrepreneurs. With its robust legal framework, trusted financial institutions, and global business standing, the UK provides an ideal environment for company formation.
However, certain circumstances—such as living abroad, protecting personal privacy, or needing UK-based representation—may prompt the need for a nominee director. When structured and used correctly, this arrangement can offer flexibility and administrative ease while remaining fully compliant with UK law.
What is a Nominee Director?
A nominee director is an individual appointed to act as a director of a company on behalf of another person—typically the beneficial owner. While the nominee is listed on the company’s statutory documents and in public records (e.g. Companies House), they may not have any operational involvement in the company, depending on the terms of their appointment.
The nominee acts under the instruction of the beneficial owner and does not benefit from or exercise control over the company unless agreed otherwise.
Is a Nominee Director Legal in the UK?
Yes. Using a nominee director is legal in the UK, as long as the arrangement is conducted transparently and in compliance with:
- The Companies Act 2006
- The Register of People with Significant Control (PSC Register)
- The Money Laundering Regulations 2017
The beneficial owner must be disclosed via the PSC register. Using a nominee to obscure ownership or evade regulations is illegal and can result in criminal prosecution, fines, and disqualification.
Why Might You Need a Nominee Director?
1. You’re Not a UK Resident
UK law requires every company to have at least one director. If you’re based overseas, appointing a nominee director ensures your company meets this legal requirement without requiring relocation.
2. You Value Personal Privacy
Company directors’ details are publicly available via Companies House. If you prefer not to associate your name publicly with a particular business, a nominee director offers a layer of privacy while still allowing lawful disclosure via the PSC register.
3. You Need Local Representation
Some banks, suppliers, or regulatory bodies prefer or require communication with someone in the UK. A nominee director can act as your UK representative, making it easier to handle administrative tasks and legal correspondence.
4. You’re Structuring an Investment or Holding Company
For corporate groups, trusts, or joint ventures, a nominee director can help separate governance from ownership. This is particularly useful in asset management or strategic business structuring.
Legal Responsibilities of a Nominee Director
All directors—nominee or otherwise—must comply with statutory duties under the Companies Act 2006. These duties include:
- Acting in the company’s best interests
- Exercising independent judgment
- Avoiding conflicts of interest
- Ensuring accurate record keeping and reporting
Even if a nominee director does not participate in the company’s operations, they are still legally accountable and must be formally appointed through a director services agreement.
Key Elements of a Nominee Director Agreement
To establish a compliant relationship, the nominee director should sign a formal agreement that includes:
- A declaration that they act on behalf of the beneficial owner
- Scope and limits of authority
- Indemnity clauses to protect the nominee
- Confidentiality obligations
- Termination and resignation provisions
This agreement should be retained by the company and may be required as part of due diligence or compliance checks.
Disclosure Requirements: The PSC Register
Even if a nominee director is listed publicly, the true person with significant control must be reported in the PSC register. This includes individuals who:
- Own more than 25% of the shares
- Control more than 25% of the voting rights
- Have the power to appoint or remove the majority of directors
- Otherwise exercise significant influence or control over the company
Failure to disclose PSCs is a criminal offence and can result in enforcement action.
Final Thoughts
A nominee director can be a practical and legal tool for managing a UK company—especially if you are overseas, value discretion, or need local representation. However, it’s essential to use this arrangement correctly and transparently.
By working with reputable service providers, drafting a formal agreement, and disclosing the true beneficial owner via the PSC register, you can enjoy the benefits of nominee services while remaining fully compliant with UK corporate law.
If you're considering appointing a nominee director, seek professional legal advice to ensure your structure is robust, legal, and aligned with your business goals.
Published: 4/24/2025 11:27:14 AM
