Four roles sit around an offshore company, and in conversation they tend to collapse into one. People talk about “the agent” as though it runs the company, describe a director as though the title were ceremonial, and treat the shareholder register as a formality.
Each role does something specific, with its own duties and its own liabilities. Getting the distinctions right matters when a bank asks who authorises payments, when a counterparty asks who can sign, and when a tax authority asks where the company is really managed.
Shareholders: ownership
Shareholders own the company. They do not run it. Their powers are generally confined to the decisions the constitution reserves to them – appointing and removing directors, approving a change of the memorandum and articles, approving a continuation into another jurisdiction, approving a dissolution, and receiving dividends when the directors declare them.
A shareholder who starts instructing the business day to day is acting as a director without the title, which in several jurisdictions carries the duties anyway. The register of members is the record of who holds what, and keeping it accurate is a statutory obligation rather than an administrative nicety: share transfers that were agreed but never entered are a recurring problem on a sale or a succession.
Directors: management and duty
Directors manage the company. They also owe duties that survive whatever private understanding exists about who is really in charge.
Across common law jurisdictions those duties are broadly consistent: act honestly and in good faith in what the director believes to be the best interests of the company, exercise powers for a proper purpose, exercise the care and skill reasonably expected, avoid conflicts of interest or disclose them, and keep proper accounting records.
Two practical consequences follow.
The duty is owed to the company, not to the person who appointed them. A director instructed to do something not in the company’s interests is in breach if they comply. “I was told to” is not a defence.
Liability is personal. Directors can be pursued for breach of duty, for trading while insolvent in jurisdictions that provide for it, and under regulatory regimes for filing failures. Limited liability protects shareholders from the company’s debts; it does not protect directors from their own conduct.
Corporate directors
Some jurisdictions permit a company to act as director of another company, and some have restricted or prohibited it in recent years, usually requiring at least one natural person on the board or that any corporate director itself be a licensed entity. Where it is permitted, the individuals behind the corporate director are still identified in the due diligence file.
The registered agent and the registered office
This is the role most often misunderstood, partly because the agent is the party most clients actually deal with.
A registered agent is a locally licensed and regulated service provider. In most offshore jurisdictions a company cannot be incorporated or remain in good standing without one. What the agent does:
- Provides the registered office – the address at which the company can be served with legal process and official correspondence.
- Files with the registry: incorporation, annual returns, changes of director or shareholder, beneficial ownership filings, dissolution.
- Maintains the statutory registers and the company’s records, or confirms where they are kept.
- Carries out and keeps the customer due diligence on the beneficial owners, and keeps it current. This is a regulatory obligation owed to the agent’s own supervisor, not a service offered to the client.
- Collects and remits government fees.
What the agent does not do: manage the company, sign commercial contracts, operate the bank account, make decisions, or act as a buffer between the beneficial owner and the authorities. An agent that offers to do any of that is offering something that will not survive examination.
The registered office is an address and a legal concept. It is not the same as the place of business, and – importantly – it is not the same as the place of management, which is a separate question taken up below.
Company secretary
Some jurisdictions require a company secretary, responsible for the statutory books, minutes and filings. Where required, it is a defined office with its own duties, often performed by the registered agent under a separate engagement.
Nominee arrangements, and what they do not achieve
A nominee director or nominee shareholder holds the office or the shares while a separate agreement – a declaration of trust, a nominee agreement, an indemnity – records that they act for someone else.
These arrangements are lawful in many jurisdictions and have legitimate uses: a local resident director to satisfy a residency requirement, a confidentiality arrangement between commercial parties, a holding arrangement during a transaction.
What they do not do is conceal beneficial ownership from the people who are required to know it. The registered agent must identify the beneficial owner, the bank must identify the beneficial owner, and in a growing number of jurisdictions that information is filed with a registry or a central platform. Our article on offshore company privacy and beneficial ownership covers where that information goes and who can see it.
Two risks are worth stating plainly. A nominee director holds real legal authority and owes duties to the company, which means they can act, and occasionally do, in ways the beneficial owner did not intend. And a nominee shareholder’s death or insolvency can put the shares into their estate or their creditors’ reach if the declaration of trust is not properly drafted and held. These are drafting and counterparty questions, and they are the reason nominee arrangements should run through a regulated provider rather than an obliging acquaintance.
Management, control and tax residence
This is where the roles stop being administrative.
Many jurisdictions determine where a company is tax resident by where it is centrally managed and controlled – in practice, where the directors actually exercise their judgement. A company incorporated in one jurisdiction whose board decisions are genuinely taken in another may be tax resident in the second, with filing obligations and a tax bill to match.
Economic substance legislation pushes in the same direction, requiring companies carrying on relevant activities to show directed and managed activity in the jurisdiction, with meetings held there, a quorum physically present and minutes kept locally. Our article on economic substance requirements covers what that means in practice, and offshore trading companies covers the related question of where functions and risks actually sit.
Board papers matter here. Minutes that record a real discussion, with options considered and a decision reached, support a substance position. Minutes signed in bulk to paper decisions taken elsewhere undermine it.
The paperwork that proves it
Whatever the arrangement, the evidence of who decided what lives in a short and unglamorous set of documents: the register of members, the register of directors, board minutes and written resolutions, the bank mandate, any nominee agreements and declarations of trust, and the beneficial ownership record held by the agent.
These get asked for at predictable moments – account opening, a change of bank, a sale, a financing, a succession, a redomiciliation. Keeping them current is considerably cheaper than reconstructing them.
Where to go next
Director residency requirements, corporate director rules, secretary requirements and filing obligations all differ by jurisdiction. Our jurisdiction pages set out the position for each, including BVI, the Cayman Islands, Singapore and Hong Kong.
Get in touch to discuss how a specific company should be structured and who should sit where.
