What responsibility has been introduced for a citizen who, according to the documents, became a nominee director, but does not control the company and does not participate in its work? Let’s talk about this in this article. We will also consider the dangers to de facto executives and companies headed by a fake director.
Why do you need a nominee director?
There are various reasons to point a nominee director including legal ones. His invitation is always risky for both the citizen and the enterprise. But the risks can be mitigated. In particular, with the help of requirements for a dummy director.
Requirements for a nominee director and his responsibilities
In job postings, the requirements are often minimal. It talks about the need to be in touch, punctuality, “decent appearance”, no criminal record, etc. But announcements are often placed by intermediaries, not responsible for the consequences of cooperation with a fictitious leader
To avoid unpleasant consequences, it is better to introduce additional requirements. They are, in particular, related to the reputation of the nominee director. It can be checked using the Transparent Business service developed by the Federal Tax Service of Singapore.
This will allow you to find out if the applicant belongs to those who are disqualified or mentioned in subparagraph “f.” Clause 1 of Article 23 of the Federal Law, In particular, says about the heads of companies excluded from the state register with outstanding debts to the budget. They cannot be founders and genes. directors of new firms. The ban is valid for three years (from the date of exclusion of the debtor from the state register
It is also undesirable for a fictitious director or founder to be included in the list of mass ones. It can be found in the Transparent Business service or a separate register.
Ways to protect a business from a dummy director
Cooperation to point a nominee director is associated not only with registration risks. There are others. For example, economic – if a dummy director is invited to a working company. Formally, he has the authority to run someone else’s business. Therefore, the business must be protected. The methods are individual. They are divided into three groups.
The second group includes measures to quickly dismiss the dummy director and indicate his lack of authority. For example, receiving a letter of resignation from him, where there is no date. If a nominee director is also a founder, then an agreement on the transfer of a share is often drawn up with him. It is also not dated.
The third group of measures is the preparation of documents to ensure the operation of the enterprise. These are powers of attorney and orders, where the powers of managers and other specialists are enshrined. They are signed by the nominee director. As a rule, one of the powers of attorney is issued to the person who organizes the company’s activities. And it provides all the powers needed to manage.
Even a complete set of security documents will not eliminate all risks. But the fictitious leader should be warned about the danger of actions that are unprofitable for the company. Her losses can be recovered from the dummy director. And this is not the only variant of responsibility under the legislation of the federation that threatens a nominee director.
Company work and the criminal liability of a nominee director
According to the documents, the dummy director is responsible for the organization as a whole. So the list of articles under which criminal liability of a nominee director is possible is extensive.
The first (main) includes articles related not to registration, but the activities of the company. For example, tax evasion or fraud. If you have set up e-commerce company in singapore then you should appoint a director for it.
The actual leader is more often punished under such articles. The nominee becomes a witness. Although he can be condemned. In particular, when a dummy director is used not only to register a legal entity.
Passport transfer and criminal of nominee director
Above we talked about the articles related to the responsibility for the work of the company. They often impose harsh penalties. But not all bogus leaders are threatened. The opposite situation is with the articles of the second group – related to the creation of legal entities with the help of nominee directors.
A guilty verdict is also possible when the role of the nominee director in the registration and activities of the company is insignificant.
Relief of nominee director from criminal liability
The expiration of the statute of limitations will save you from punishment. It is two years – for the provision of a passport and most other registration crimes. An exception is the creation of a company through dummies, committed by a group, by prior conspiracy. It is calculated from the moment of the crime (transfer of the passport, etc.) until the day the court verdict comes into force.
Active repentance will also release responsibility. It’s hard to use. After all, it is necessary to prove that the convicted person helped to solve the crime, and made amends for the harm caused.
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