Fiduciary Management
We help to organize a secure transfer of the trusted company to the trustee or arrange a buyback option in a risk-free manner.
Due to the recent changes in legislation and the current economic situation the question of how to arrange fiduciary management becomes more and more urgent for shareholders of Russian foreign entities.
What is it?
Fiduciary management is the process of transferring the management of a company to a third party in order to ensure the effective management of assets.
A trustee is an individual or legal entity who, by decision and trust of the founder and / or shareholder, is entitled to perform any actions that fall within the competence of a shareholder, but is not entitled to dispose of shares in the authorized capital. That is, he/she owns the entire scope of the rights of the owner, except for the alienation of shares.
Types of fiduciary management:
- Complete. Complete fiduciary management implies that a trustee fully manages the assets without the participation of the founder (shareholder).
- By agreement. In this case, the trustee acts at his/her own discretion, but coordinates his/her actions with the founder (shareholder).
- By order. The trustee acts according to the strict instructions of the founder (shareholder).
- Buyback option. The trustee buys the shareholder’s stake, but he/she will have an opportunity to buy it back later, for example, when conditions are more favorable.
How it works?
In order to arrange fiduciary management, it is necessary to prepare an agreement between the trustee and shareholder/s, which will describe his/her powers, the type of fiduciary management, as well as the terms and conditions for termination, etc.
In general, under a fiduciary management agreement, the trustee undertakes to manage the property in the interests of the founder (shareholder) or the person specified by him/her.
The law does not prescribe the conclusion of a fiduciary management agreement in the presence of a notary, in case the shares are not alienated. Therefore, a simple written agreement will suffice.
At the same time, in order for the trustee to exercise his/her rights to participate in general meetings, it is necessary to draw up a notarized power of attorney.
It is necessary to inform the tax authority about the transfer of shares to the trustee within three working days from the date of conclusion of the fiduciary management agreement.
The shareholder is not required by law to notify the Legal entity, but it is recommended to do so in order to optimize management process.
Our services:
- Drawing up a fiduciary management agreement
- Registering the share sale with authorities
- Arranging a buyback option
- Informing tax authorities about the transfer of shares to the trustee
- Rendering trustee services