MasiboLaw

By Meshack Masibo and Joy Kawira

When starting a new business or branching out into a new country, you will need to comply with the local laws, open a bank account among other things.  This can prove to be very difficult if you don’t know anyone in the country and are afraid of handing over control of your company to a stranger in a foreign land. This is where it is important to get a Nominee Director.

A nominee director is a person, mostly a lawyer or law firm, who serves as a director on behalf of another individual (the nominator),  acting according to the nominator’s instructions or wishes. A nominee director serves as the legal ‘face’ of the company.”

In Kenya, the Companies Act does not explicitly address the concept of nominee directors.  However, under section 93A of the Companies Act, 2015 (“the Act”) companies are required to keep and lodge with the Registrar of Companies a register of its beneficial owners.

Key Aspects of a Nominee Director

1. A nominee director is a third party you appoint via a nominee director agreement

2. A nominee director does not hold shares in your company and will not be involved in the company’s everyday operations. This means that they hold a non-executive role in the company.

3. A nominee director is only allowed to act based on your instruction as the Ultimate  Beneficial Owner of the Company.

What are their roles?

A nominee director assists you meet your legal obligations while maintaining confidentiality and  regulatory compliance by performing roles such as;

1. Opening a local  bank account
2. Ensuring compliance with local laws
3. Providing a local physical address
4. Ensuring timely filing of annual statutory documents with regulatory authorities.
5. Representing the interest of the ultimate beneficial owner in board discussions and decisions.
6. Conducting urgent business that comes up and needs to be conducted quickly using a nominee.

In conclusion, having a nominee director can make it simpler for you to set up operations in a new country. In Kenya, a nominee director will help you open a bank account, comply with local laws and conduct urgent business that needs a director to be physically present.

The writers are lawyers who specializes in offering legal services to people in technology, you can contact them through info@masibolaw.co.ke