Risks of a Nominee Director
Posted: Sun Jan 19, 2025 5:15 am
Risks of a Nominee Director
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 india business email list 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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"Executive Director: Secrets of Hiring and Peculiarities of Activity Control"
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.
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 india business email list 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.
Read also!
"Executive Director: Secrets of Hiring and Peculiarities of Activity Control"
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.