If a nominee director is offered company shares as payment, document what is actually proposed before treating the fee as settled. Becoming a shareholder can create rights and obligations separate from holding a director appointment.
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Identify whether the proposal involves new shares, a transfer of existing shares or only a promise of shares later. Those are different transactions requiring different records.
Explain who will own the shares
Confirm whether the director is intended to own the shares beneficially or hold them under an arrangement for someone else. Do not assume that being a nominee director automatically makes every share held by that person a nominee shareholding.
Give the company secretary and advisers the actual agreement and instructions. Review relevant register and disclosure obligations on the facts, rather than choosing a label solely to fit a template.
Example: the founder promises a percentage
A founder says the nominee will receive a percentage of the business instead of cash fees. Clarify the number and class of shares, dilution assumptions, timing and conditions. A casual percentage statement may not identify a completed or even sufficiently defined transaction.
Prepare the remuneration and ownership terms
- The services and fee being settled.
- The party providing or issuing the shares.
- The holder, class, number and rights.
- Valuation and any outstanding cash amount.
- Vesting, transfer or exit restrictions.
- Approvals and completion evidence required.
Ask legal advisers to review the arrangement and any conflict. Avoid relying on an unsigned cap table as the entire agreement.
Keep corporate approvals separate
If new shares are proposed, review ACRA’s allotment requirements and the company’s constitution and agreements. A fee agreement does not automatically complete the shareholder approval or filing process.
Where existing shares are transferred, identify the transferor and relevant restrictions and tax questions. The company cannot simply issue a certificate for someone else’s existing holding without the proper transaction.
Review the accounting and tax evidence
Tell the accountant what services were provided, the agreed consideration and actual completion date. Non-cash payment does not remove the need to assess remuneration, valuation and relevant reporting.
Do not mark a fee paid in the accounts solely because shares are expected. Reconcile the obligation to the executed transaction and obtain advice on the appropriate treatment.
Plan the eventual service exit
Review what happens to the shareholding if the director resigns or the service agreement ends. A director’s exit and a shareholder’s exit should not be assumed to occur together automatically.
Preserve the corporate and service documents in one indexed file, with the actual owner and continuing rights clear.
Does resigning as nominee director remove the shares?
Review the ownership terms and any lawful transfer process separately.
Does a promise of equity settle the service fee immediately?
Check the actual agreement and completion. Do not assume a proposed payment has occurred.
Related director and company resources
Read our nominee-director overview, company constitution guidance and nominee register guide.
Get help with the director’s documents
For corporate secretarial support and director appointment records, email [email protected] or WhatsApp +65 8501 7133. Legal advisers from our associated law firms can assist with service agreements, guarantees, contractual disputes and other legal questions. Our accounting team and tax advisers can review related financial matters where required.