This page contains answers to the most frequently asked questions relating to offshore company formation.
What is an annual return?
This is a form which is completed every year following the company formation and filed with the Registrar of Companies or other equivalent statutory authority. The annual return contains information on such matters as the company’s registered office address, directors, company secretary, shareholders and registered charges. The purpose of the annual return is to ensure that the information maintained by the Registrar of Companies is maintained up to date.
What is an audit?
An audit is the independent examination of a company’s financial statements by a professional auditor before they are presented to the company’s shareholders. In some jurisdictions, financial statements also need to be audited before being filed with tax or other statutory authorities. The choice of jurisdiction for the company formation will determine whether the company’s financial statements need to be audited or not.
What are bearer shares?
Bearer shares are shares which are not registered in the name of the shareholder but instead issued in such a form that they belong to the person who physically holds the share certificate. The shares are transferred by simply delivering the share certificate to the new shareholder. Very few jurisdictions continue to allow a company formation with bearer shares nowadays and if they are allowed, there will usually be conditions attached as to where the share certificates may physically be kept.
What is a beneficial owner?
The person who is the ultimate legal owner of a company’s shares is called the beneficial owner. During the company formation, it is possible for the shares to be registered directly in the names of the beneficial owners but if they prefer to keep their identity confidential, then the shares can be registered in the name of nominee shareholders.
What is a beneficiary?
A beneficiary is a person who is entitled to receive distributions of income or capital from a trust, in accordance with the terms of the trust deed. Not to be confused with the beneficial owner of a company.
What is the function of a company secretary?
In some jurisdictions it is mandatory to appoint a company secretary at the time of the company formation. The company secretary is responsible for maintaining certain official records of the company, such as the minutes of all meetings of the directors and shareholders and information relating to the company’s officers and shareholders. Where an annual return needs to be submitted, this is usually done by the company secretary.
What is a director?
A director is a person appointed by the company’s shareholders or by the board of directors, who is responsible for managing and controlling the business affairs of the company. The directors are answerable to the shareholders and are legally accountable for the company’s transactions and activities. Some jurisdictions allow one company to act as director of another. This is called a corporate director. In most jurisdictions, at least one director must be appointed at the time of the company formation.
What is a fiduciary?
A fiduciary is a person who has been given the power to deal with another person’s assets or affairs, in whose best interests he has a duty to act at all times. In particular, the fiduciary may not abuse his position in such a way as to achieve personal gain or profit for himself.
What is a nominee?
A nominee is a person who holds assets on behalf of another person. In the case of a company formation, it is common for the shares of the company to be held by nominee shareholders on behalf of the beneficial owners. It is also possible for a company to act as a nominee of another person or company.
What is a nominee director?
This is a term of no legal standing, often used to describe the appointment of a person as director of a company, whose business simply is to accept such appointments in exchange for a fee and who typically takes a superficial or no interest in the company’s business activities. This is not a term which Offshore Company Solutions supports, nor a service which we provide. Where Offshore Company Solutions is requested to provide professional directors for a company formation, the directors will act in a professional manner, complying with the legal duties and responsibilities carried by this office.
What is a nominee shareholder?
A nominee shareholder is the person who appears as the registered shareholder in a company formation but who holds the shares on behalf of another person, normally undisclosed, who is called the beneficial owner. The nominee shareholder can be an individual or another company.
What is an offshore financial centre?
Any country which is located away from a person’s country of residence and where financial services are available, usually with reduced or no tax obligations, can be called an offshore financial centre.
What is a registered agent’s role in company formation?
Companies which have no physical presence in their country of incorporation are normally required to maintain a registered agent there. A registered agent is a licensed and regulated professional individual or firm. The function of the registered agent is first to carry out the company formation. After that, the registered agent will maintain certain records and receive and deal with official notices or correspondence on the company’s behalf.
What is a registered office?
The official address of a company in the country of the company formation is called its registered office. The registered office is where financial and statutory records relating to the company, its officers and its affairs are normally kept. Some jurisdictions allow for these records to be kept in other locations where the company has a place of business.
What is the function of the Registrar of Companies?
The government officer who has the power to administer company formation and the responsibility to maintain information on all companies registered in a jurisdiction is called the Registrar of Companies. Depending on the jurisdiction concerned, the information kept by the Registrar of Companies may or may not be available to the public.
What is a settlor?
The settlor is the person who creates a trust by transferring assets to a trustee. The trustee has the obligation to administer those assets for the benefit of a group of people known as beneficiaries.
What is a shareholder?
A person who holds shares in a company formation limited by shares is called a shareholder. The shareholder exercises control over the company’s affairs through the appointment of directors and is entitled to receive dividends from the company’s profits. In the event of a company’s liquidation, any remaining assets are also distributed to its shareholders.
What is a trustee?
The trustee is the person who holds the assets belonging to a trust and who is responsible for the administration of these assets for the benefit of the trust’s beneficiaries. The trustee always acts in accordance with the directions given by the settlor upon creation of the trust, as documented in the trust deed.