Identification of an offshore company’s owner

Virtually, all experts for offshore issues had to deal with the situation, when some people applied tothem with the request to extend the power of attorney for an offshore company. It is evident that the first step for the consultant prior to any works on this issue shall be identification of the client.

Identification process

The identification process of both the client himself and his relation to the mentioned company is rather long and dreary. The specialist has to review all available data from open sources unless it is not prohibited by the laws of this jurisdiction. Then the documentation in the resolution folder shall be studied carefully. In no less detail, it is necessary to review the protocols, securities certificates, trust declarations and agreement with the beneficiary. The only condition in this case is as follows: a person, who wishes to conduct any activities with an offshore company, must have the status of its beneficial owner or be its sole shareholder.

Though, one comes across rather unusual situations in this aspect from time to time. For example, an expert for offshore issues knows that he worked with the documentation of this company previously, but the contact person was a quite another person. Or some suspicious characters applied previously to a consultant to work out this issue, but for various reasons they were refused in the qualified assistance.

Meanwhile, there may be another situation, when a potential client has a document for the full right of ownership of the company. Here is an important nuance, namely, if the company issues securities to this bearer and he/she has a share certificate, then he/she is an owner. And it is really a good way to hold your assets. However, on the other hand, the certificate can be stolen or lost.

“Immobility” of bearer shares

In some jurisdictions, supervision over the “immobility” of bearer shares is used in practice. The core of this process is that the responsible specialist or company involved in servicing monitors movement of shares and paperwork of this movement. If the certificate does not contain the owner’s name, it is not an evidence of anonymity. Each transfer of securities (share certificates) shall be drawn up in a proper documentary manner. The resolutions, protocols, sales and purchase agreements of valuable assets shall be available. All documents are prepared in accordance with the laws of this offshore jurisdiction, signed and stamped. In this situation, it is not allowed to issue documents without signatures of the directorate and previous shareholders.

But what if the original ownership was not documented properly? Or if the newly registered offshore company’s owner forgot to fill in the blank fields in the certificate and just put the document in the folder? Broadly speaking, the identification result will depend on three main factors:

•  jurisdiction as the conditions for the ownership documenting in various jurisdictions differ;
• personal and professional qualities of the consultant and former administrative manager of the company (whether they pay attention to the apparent discrepancies in the history or not);
•  competent preparation of documents at the initial stages.

In this case, the dilemma of confidentiality or complete control comes to the fore. It is clear that not everybody wants to see his name in the offshore company documentation and reads information printed on the documents in small print thoroughly. But this can lead to such event that one day you will be dispensed from all the acquired property not by your choice.