New Limited Co - can shareholders identity be hidden (legally!)

[GraemeL]

Hello,
We are at the start of a new venture in the UK, where we would not want competitors to know the shareholders names or the shareholders company. I have not involved solicitors yet.

Is this possible?

Thanks

Graeme

 

[The Resolver]

Yes through nominees, either as individuals acting under a nominee agreement holding shares in trust or similarly through another company owned by others under a similar arrangement. Ideally you need not just the agreement protecting your rights and powers but also be given share transfer forms signed by the nominees that you can complete and present any time to transfer the shares into your own names when you feel ready do so together with appropriate Resolutions to ratify the transactions.

I appreciate the genuineness of the reasons to do this in your case but obviously I must state the obvious for the benefit of others reading this that you would still have to declare your true status as owners to HMRC.

A more difficult issue arises as to the directors. Its a very risk heavy duty to take on the role of a director on behalf of someone else.

If the Articles of Association are written in a certain way then you can also appoint Alternate Directors to attend meetings and make decisions of the Board (eg the nominees can appoint the real owner of the shares as 'alternates'). You would also need cover this heavily in the agreement document.

But there is cost for nominees and I wonder whether it is really that important to hide your identity from your competitor. If they are a close competitor surely they will find out especially if the nominees you use offer this service generally and thus can readily be identified as nominees.

Just a speculation but if a contributing reason is because you are on a bar out from previous employment with the competitor then maybe better to take advice on that point first.

PM me if you need an further advice or documents drawn up?

 

[GraemeL]

Thanks for your comments Resolver.

This is genuinely the case of a new start up business that will be ran entirely within the UK law and with HMRC informed as much as we are required. All above board. The only issue that needs to be cloudy is the share ownership of the business.

If they are a close competitor surely they will find out especially if the nominees you use offer this service generally and thus can readily be identified as nominees.

Are you inferring that a nominee cannot actually truly hide the shareholders identity?

Just a speculation but if a contributing reason is because you are on a bar out from previous employment with the competitor then maybe better to take advice on that point first.

No, absolutely no issue there, or in any similar scenario.

A more difficult issue arises as to the directors. Its a very risk heavy duty to take on the role of a director on behalf of someone else.

Are you able to say a little more about this please? I would have though that all Directors have onerous responsibilities whoever the shareholders are? I suspect I am missing your point!

Thanks very much

G

 

[Bob]

Not that they have done anything yet, but Vince Cable is keen to enforce the disclosure of the identity of anyone owning more than 25% of the shares in a private company. See here

 

[GraemeL]

Yes, I recall that. Still he won't be around much longer.
We can work with sub 25% shareholdings across the several owners.

 

[Bob]

Are you able to say a little more about this please? I would have though that all Directors have onerous responsibilities whoever the shareholders are? I suspect I am missing your point!

I suspect the he was assuming that if you wished to hide your identity as shareholders, you would also not wish to be on record as directors.
More difficult to find a nominee director because of the responsibilities placed on them

 

[GraemeL]

Right! There is no problem in disclosing the identities of the Directors.

 

[The Resolver]

I suspect the he was assuming that if you wished to hide your identity as shareholders, you would also not wish to be on record as directors.
More difficult to find a nominee director because of the responsibilities placed on them

Thanks Bob and , yes, that is what I was referring to.

Graeme, as to nominee shareholders, I did not mean they would not protect the identity of the shareholders to Joe Public ( although they could not to do that to HMRC but that is not the problem ) but that if they were a company who provided such nominee services then the fact that they were nominees might put others on notice to dig further. So better to find someone to do it as a one off.

 

[GraemeL]

Great information Graham.
Now I will be entering into discussions with those in the project. May well be in touch direct in the future.
Thank you.

 

[munya]

What if the company who is assigned to be the nominee shareholder goes out of business? It'd seem like a massive hassle to chase down the administrator to get your shares back.