The benefits that accrue to the nominee after the death of the beneficial owners are taxable in the hands of the nominee as an economic interest related to the shares on which the nomination is registered. A nominee is responsible for complying with the payment of taxes and other debts he receives with the shares. Therefore, the nominee is required to pay tax for the benefit he received or to transfer the benefit to other shares he received after the death of an initial economic holder of shares. After the death of a shareholder, the shares are transferred to nominee`s shareholders. He will have all the rights like the original shareholders. You are a trustee for the legal heirs of a deceased shareholder. They cannot own shares until they are registered in the will of deceased shareholders. The appointment on shares alone cannot consider the nominee as the owner of the share as long as the will of a shareholder does not require it. An appointment is only an eventful transfer without action when shares publish the death of a shareholder.
Although supervisory authorities and exchanges regularly audit the nominated accounts, the process is not carried out on a daily basis. Since a stockbroker can at any time move or sell shares of Nominee accounts, there may be fraud. This is especially common when a company is on the verge of bankruptcy and needs cash or assets to honor its commitments. A stockbroker`s records can change, making it more difficult to determine which investors have assets in a Nominee account. A nominee must make a refining statement of confidence that he or she has no advantage over the shares until the original shareholder is alive. This declaration is called a custody agreement. As part of the deposit agreement, the nominated shareholder holds the shares. Any person or entity may hold legal security in shares under appointment.
Even a minor can be a candidate for shares in a company. If the nominee is a minor, the shareholders shall designate any other person who, in the event of the death of the shareholders, will be entitled to shares during the minority of the nominee. In real estate matters, the Nominee contract can effectively transfer legal ownership of a property to another person. The agreement also sets out what can be done with the property and how the benefits and responsibilities of that property are to be managed….