How to maintain 100% company ownership without becoming a director?

I

ivorystraws

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Hi All,

If an Entrepreneur had a business and wanted to incorporate it (as a limited company) yet ensure to maintain 100% ownership but did not want to be a director, secretary etc on the board (i.e. did not want to be publicly visible), is this possible?

I realize that there will have to be two directors to incorporate.

All helpful suggestions, insights, hints/tips are welcome.

Thanks.
 
Hi

That is easily done, the shareholder and directors are two seperate roles within a company and can be occupied by different people/person
 
Indeed you can be 100% owner of a company without being a director of that company. The directors will however be responsible for the day to day running of the company for you as the shareholder, so they will need remuneration I guess unless they are a. family b. in for a cut if you are successful.
About being public and visible, if memory serves me correctly even the short form of return of accounts to the Companies Registration Office only the Directors interest in shares have to be disclosed. But in the Annual return B1 form the shareholders past and present must be reported. The shareholding cold be owned by a holding company which makes it less obvious who owns it.
 
Hi

The short annual return (or B1s) was done away with a number of years ago for obvious reasons. You can only file the full B1 which gives full details of the shareholdings.

Also if you are not a director but in fact call the shots and run the company yourself as if you are a director then you may be deemed to be a "shadow director".

This can have important implications if the company gets into difficulty or becomes insolvant.

Regards

capnhand
 
Thanks for the clarification "capnhand". I did mean the abbreviated accounts rather than the B1s so sorry if I confused there.
I agree that "shadow director" or defacto director can have the implications that you outline if the OP is effectively the one that wields the axe.
 
bazermc said:
Hi

That is easily done, the shareholder and directors are two seperate roles within a company and can be occupied by different people/person
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Thanks for the clarification. Fullfilling roles/titles isn't my problem. My problem is that I currently own 100% of the business and if a company is incorporated for the business, I don't want my name coming up as a result of a CRO search or on any returns but I do want to maintain full control and will be running it.

How do I go about setting that up i.e. ensuring anonymity yet retaining full corporate control?
 
Thanks Woodie. On paper, the directors may be responsible but I will be running the company. I do initially intend on making some family members directors.

Good point about the shareholding being owned by a holding company - that is an option I hadn't thought of although it does make the setup needlessly complex for a small startup.
 
I would be calling the shots and running the company myself as if I was a director so would that make me a "shadow director"? If so, what are the differences between that and a normal limited company director? What implications does this have on the company?

As a shadow director, will I be visible on any corporate returns or CRO searches?
 
RonanC said:
What are you trying to hide?
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Who says I'm trying to hide anything? I've been a director previously and incorporated my own company myself so I don't understand your point... it's a simple enough question.
You have to give Director details including "shadow directors" or "Alternate Directors" on the A1 Company incorporation form that rules out that.

Capnhand provided the most helpful response to date so re-read his response to understand the details on this.
 
You are trying to hide your involvement/running of this company from the public. Every company in Ireland must disclose all directors, shadow or not and all shareholders.


So the question is valid, what are you trying to hide?
 
ivorystraws said:
Who says I'm trying to hide anything?
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OK, lets rephrase the question, what would be the advantage of doing this??? One of the reasons for incorporating is to take advantage of limited liability status, if you operate as you are proposing it is very likely that you would loose this right in a legal action... depending on your situation, there might be a tax advantage, but in most cases not.... so from my point of view it looks like a rather pointless exercise:confused:
 
RonanC said:
What are you trying to hide?
Click to expand...

ivorystraws said:
Who says I'm trying to hide anything? I've been a director previously and incorporated my own company myself so I don't understand your point... it's a simple enough question.
You have to give Director details including "shadow directors" or "Alternate Directors" on the A1 Company incorporation form that rules out that.

Capnhand provided the most helpful response to date so re-read his response to understand the details on this.
Click to expand...

You're trying to hide your identity from your customers, suppliers, bankers, Revenue and whoever else that could have an interest in the company.

It may be legally possible to put a corporate structure in place where the true beneficial owners are not disclosed. In my opinion it is both morally and ethically questionable.

However, one fact you cannot get around is that the directors are ultimately responsible, and can be held accountable, for the actions of the company regardless of whether or not they actually had any active role in the management of the company. Those directors would also have full control of the purse strings.

So do you have 2 directors that trust you to such a degree that they'd stand up in court and take the rap for you? Do you have trust in them to the degree that if you have a falling out they'll hand control over to you rather than shut you out completely?

(Rhetorical questions, btw, I don't expect answers!)
 
Jim2007 said:
OK, lets rephrase the question, what would be the advantage of doing this??? One of the reasons for incorporating is to take advantage of limited liability status, if you operate as you are proposing it is very likely that you would loose this right in a legal action... depending on your situation, there might be a tax advantage, but in most cases not.... so from my point of view it looks like a rather pointless exercise:confused:
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I'm definitely not trying to hide anything but I don't see how limited liability would be lost? The company is the legal entity. Any tax advantages would benefit the corporate entity and hence my shareholding but not me directly.

Either way, I would be listed as one of the shareholders of the company so that's fine.
 
ivorystraws said:
Thanks Woodie. On paper, the directors may be responsible but I will be running the company. I do initially intend on making some family members directors.

Good point about the shareholding being owned by a holding company - that is an option I hadn't thought of although it does make the setup needlessly complex for a small startup.
Click to expand...

I can see that people are complicating this query with all sorts of issues including morality. I don't think that "ivorystraws" is trying to avoid personal responsibility, or at least I hope not, and family members are involved so theer is at least accountability to them. The issue as I see it is; can a company be set up without the true owner being immediately transparent in a CRO search?

1. I still think having a company or trust as the owner of the shares is the option. Of course if the owning (holding) company is based in Ireland then people can search that company, so offshore is probably the option. Is it complex, not mega, but for a small startup maybe needlessly complex. Depends on how big you intend the company to get whether it makes sense in the long run.
2. An alternative maybe to have a proxy shareholder hold the shares in your stead with a private agreement; then we are getting into more complex law where you would need advice.
It's not simple because of the reasons that people have mentioned. The law is protecting you (shareholder) with Limited Liability and the quid pro quo for that is that you provide the details of exactly who is benefiting. A reasonable ask, but I do understand there are many legitimate reasons why people don't want their initial involvement in a business to be apparent at the outset.
 
smeharg said:
You're trying to hide your identity from your customers, suppliers, bankers, Revenue and whoever else that could have an interest in the company.

It may be legally possible to put a corporate structure in place where the true beneficial owners are not disclosed. In my opinion it is both morally and ethically questionable.

However, one fact you cannot get around is that the directors are ultimately responsible, and can be held accountable, for the actions of the company regardless of whether or not they actually had any active role in the management of the company. Those directors would also have full control of the purse strings.

So do you have 2 directors that trust you to such a degree that they'd stand up in court and take the rap for you? Do you have trust in them to the degree that if you have a falling out they'll hand control over to you rather than shut you out completely?

(Rhetorical questions, btw, I don't expect answers!)
Click to expand...

No, as aforementioned, my identity is revealed as one of the shareholders of the company so that's fine for now. I won't have any suppliers, it's a international transactional business so customers won't be dealing with me, financial institutions as opposed to bankers will know me obviously as I'll be dealing with them directly and the Revenue will be aware of whatever is submitted to their offices so no, nothing is being hidden.

Isn't it legally possible to put a corporate structure in place where the true beneficial owners are not disclosed by way of a holding company being a majority shareholder? Either way, I've no intention of doing that so don't need a response.

Yes, true, the directors are ultimately responsible, and can be held accountable, for the actions of the company but how would they have control financially if they didn't have any shareholding and didn't manage and operate the business? (Rhetorical question, btw, I don't want any responses thanks)
 
Woodie said:
I can see that people are complicating this query with all sorts of issues including morality. I don't think that "ivorystraws" is trying to avoid personal responsibility, or at least I hope not, and family members are involved so theer is at least accountability to them. The issue as I see it is; can a company be set up without the true owner being immediately transparent in a CRO search?

1. I still think having a company or trust as the owner of the shares is the option. Of course if the owning (holding) company is based in Ireland then people can search that company, so offshore is probably the option. Is it complex, not mega, but for a small startup maybe needlessly complex. Depends on how big you intend the company to get whether it makes sense in the long run.
2. An alternative maybe to have a proxy shareholder hold the shares in your stead with a private agreement; then we are getting into more complex law where you would need advice.
It's not simple because of the reasons that people have mentioned. The law is protecting you (shareholder) with Limited Liability and the quid pro quo for that is that you provide the details of exactly who is benefiting. A reasonable ask, but I do understand there are many legitimate reasons why people don't want their initial involvement in a business to be apparent at the outset.
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Thanks Woody, you're right, it's a simple question that I'd just like answers to but people are entitled to their opinions ...although I've yet to meet anyone who can make a definitive statement on business so any definitive or accusatory statements are redundant and and ignored by me.


  1. I would be very hesitant to have a company or trust as the owner of the shares but it is the option, thanks. I did think about the offshore option but I'm not too familiar with that setup plus I still think it would be needlessly complex for my businesses needs. Maybe as things progress though.
  2. A proxy shareholding would be complex, require expert advice and could potentially be fractious (depending on the people involved). I obviously do want the the law's protection as a shareholder and the company will have Limited Liability so you make a good point about what I should expect in return.
Yes exactly, there are many legitimate reasons why people don't want their initial involvement in a business to be apparent at the outset... but that's only at the outset.... thereafter depends on how well the business does. Obviously it would make things much more complicated if the business didn't trade profitably or got into legal squabbles so I'm conscious of that.
 
Hi Sorry if this is a silly answer but can you not set up the company using a 2 Nominee Directors,s Nominee secretary and Nominee shareholders and registered office. granted i know there is an extra cost for this.
 
Capnhand mentioned Shadow Directors...

Section 27 of the Companies Act 1990 states:

(1) Subject to subsection (2), a person in accordance with whose directions or instructions the directors of a company are accustomed to act (in this Act referred to as “a shadow director”) shall be treated for the purposes of this Part as a director of the company unless the directors are accustomed so to act by reason only that they do so on advice given by him in a professional capacity.
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So, you asked

I would be calling the shots and running the company myself as if I was a director so would that make me a "shadow director"?
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The above piece of legislation would make you a director and you must be listed as one.
 
You could use an umlimited company with the risks that are attached to that and then have the shares owned by a company outside of the country, for example an Isle of Man company, which doesnt have to publish its accounts.
 
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