Some people are sure that working in a nominal position, as well as the activity of attracting such employees, is pure fraud. But this is not so. The current legislation of the Russian Federation does not prohibit the use of such persons in the company's activities. Such a concept as a nominal director, in principle, does not appear in any regulatory legal act, which means that liability for this does not arise, including in the current 2021.
Of course, the law prohibits creating an enterprise with the involvement of fictitious persons. But even an experienced lawyer is unlikely to be able to prove in practice the fictitiousness of this or that employee. Accordingly, the risks of both parties are reduced to a minimum.
The danger lies in the following. The nominal director signs documents and performs certain actions initiated by the employer, which means that the fictitious manager cannot influence this process in any way. That is, he bears full legal responsibility for the decisions of other people. If suddenly the true owner of the company decides to conclude a fictitious transaction or commit any fraudulent actions, then when this is revealed, the responsibility will fall on the shoulders of the nominal director, since all the documents bear his personal signature.
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It is possible to prove that the person who signed the documents was a fictitious director only if it is shown that he acted within the framework of an agreement with the real director of the company. And there is liability for transactions through fictitious persons.
Before agreeing to this, the nominee director must carefully weigh all possible risks and consequences, learn the company's scope of activity and its specifics, and clearly understand what goals the employer is pursuing.
5 Reasons to Hire a Nominee Director
5 Reasons to Hire a Nominee Director
There are various reasons why a company might start looking for a "nominee director" position. Some of them are not at all contrary to the law. Potential risks can be reduced by initially looking for a candidate who meets a number of specific requirements.
Here are some of the reasons:
If in fact the director of several companies is the same person, this may raise questions from the tax inspectorate, which recognizes the enterprises as interdependent . To avoid such disputes, they resort to the fact that on paper they appoint another person as the director of one of the enterprises.
The company is practically inactive. But due to some undesirable consequences, such as a possible inspection by regulatory authorities in connection with exclusion from the register of legal entities or the planned resumption of business in the near future, it is often decided to replace the real head of the company with a nominal one.
The true leader does not want or cannot lead the company for a number of reasons : he has the status of a civil servant, is disqualified, etc.
The need to divide a business into several companies or transfer assets to a formally independent enterprise.
For joint-stock companies, there are mandatory requirements for coordinating interested-party transactions with members of the board of directors (and sometimes with shareholders). That is, the directors of the companies that are parties to the transaction are persons who are close relatives of each other. This means that when replacing one of them with a nominal person, no coordinating is required.