Can I hold shares as a nominee for someone else?

It is acceptable for a shareholder to nominate someone else to hold their shares, if the company’s articles allow it (Section 145 Companies Act 2006). Therefore, a shareholder could nominate someone to attend and vote at meetings in their place, or they could nominate a relative to receive their dividends if they wish. However, the nomination rights are restricted, in that shareholders cannot delegate the power to enforce any of their rights against the company or to transfer their shares.

In these situations, the share’s legal interest is held by the nominee, while its beneficial interest is held by the investor.

There would normally be a Declaration of Trust between the Nominee and the Owner.

The ‘legal owner’ is shown as the nominee on the register of shareholders, attends shareholders meetings and votes, the ‘beneficial owner’ is hidden provided they don’t own more than 25% or have significant control over the board, otherwise they would need to have their details disclosed on the PSC register.

Nominee shareholders can be useful for investors who want professionals to manage their investment, they can then delegate authority to the Nominee to make decisions on their behalf.

The Beneficial Owner will be taxed in the normal way on dividends and capital gains.



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