Declaration of Trust by a Nominee
Shares
This is a Declaration of Trust by a nominee to a beneficiary in respect of share(s) held by the nominee on behalf of the beneficiary. It is to be executed as a deed. The Nominee declares that a certain amount of ordinary share in the capital of the company and now registered or about to be registered in the beneficiary's name and has been held by him/her in trust for the beneficiary and that he/she has no beneficial interest in the Share(s).
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The document should be signed by the authorised signatory (or directors of a company) and witnessed to complete the formality.
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Document Description
The Declaration of Trust by a Nominee is a legal document that establishes a trust relationship between the party making the declaration (referred to as the 'Nominee') and the beneficiary. This document is important as it clarifies the ownership and control of shares held by the Nominee on behalf of the beneficiary.
The entire document consists of a declaration made by the Nominee to the beneficiary, stating that the shares in question are held in trust for the beneficiary and that the Nominee has no beneficial interest in them. The declaration also includes undertakings by the Nominee to transfer the shares as directed by the beneficiary, to account for any dividends or distributions, and to exercise voting and other rights on behalf of the beneficiary.
The document further includes a provision for the appointment of the beneficiary as the Nominee's attorney, granting them the authority to transfer the shares and execute necessary documents on behalf of the Nominee.
In summary, this document serves to establish a trust relationship between the Nominee and the beneficiary, ensuring that the beneficiary has control over the shares held by the Nominee.
How to use this document?
To use the Declaration of Trust by a Nominee, follow these steps:
1. Identify the parties: Clearly identify the Nominee and the beneficiary in the document. This ensures that both parties are accurately represented.
2. Declare the trust relationship: The Nominee should make a clear declaration that the shares in question are held in trust for the beneficiary and that the Nominee has no beneficial interest in them. This establishes the trust relationship.
3. Specify transfer instructions: The Nominee should undertake to transfer the shares as directed by the beneficiary. This ensures that the beneficiary has control over the shares and can direct their transfer as needed.
4. Account for dividends and distributions: The Nominee should commit to account for any dividends, interest, or other distributions in respect of the shares and transfer them to the beneficiary. This ensures that the beneficiary receives the financial benefits associated with the shares.
5. Grant voting and other rights: The Nominee should agree to exercise voting and other rights on behalf of the beneficiary as directed. This ensures that the beneficiary can participate in corporate decision-making.
6. Appoint the beneficiary as attorney: The Nominee should appoint the beneficiary as their attorney, granting them the authority to transfer the shares and execute necessary documents. This empowers the beneficiary to act on behalf of the Nominee.
By following these steps, both the Nominee and the beneficiary can establish a clear and legally binding trust relationship regarding the shares in question.
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