Our guidelines are clear: we will not transfer money.
Why is it not a problem if we, as your nominee, can’t transfer money?
We can, as per your order, sign a subrogation order1 for the company. In this subrogation order, the nominee (the subrogor) will simply order the company to transfer a defined amount to a third party (the subrogee). The result is: the company shall remit the defined amount of money in lieu of remittance to the nominee.
Note: Subrogation order is usually not needed if the entity is registered in a jurisdiction where there is no audit requirement.
- We act as a nominee shareholder.
- At the end of the year, the shareholder is entitled to US$1000 of dividends.
- You ask us a subrogation order for an amount of US$500, with details of the beneficiary (a different person than the shareholder).
- We prepare the subrogation order (additional fees apply, check our fees).
- The nominee shareholder sends the subrogation order to the company.
- The company, in the name of the shareholder, sends the money to the beneficiary.
- The payment to the beneficiary is deemed to have been sent to the shareholder.
Subrogation rights can arise even where there is no contract between subrogor and subrogee2, so it is clearly not necessary for there to be an express or implied term. A subrogation order can be created, even if there is no link between the nominee shareholder and the beneficiary.
- Invented by PROMINEE, in May 2009
- Esso Petroleum v Hall, Russell & Co Ltd (1989) AC 643