What are Nominee Owners?
Nominee owners are individuals whose names are listed as the legal owners of a company, yet they do not actually possess or exercise significant control or benefit from the company’s operations. In many cases, nominee owners are appointed to conceal the identity of the true beneficial owners, who may want to remain anonymous for various reasons, including privacy or avoidance of public scrutiny.
Under the Corporate Transparency Act (CTA) and FinCEN’s regulations, reporting companies must disclose the identities of actual beneficial owners rather than merely listing nominee owners. This requirement aims to prevent nominee ownership from being used to obscure the true control and ownership of an entity, which could otherwise be exploited for illicit activities such as money laundering, tax evasion, and fraud.
Nominee ownership is a red flag in anti-money laundering (AML) efforts, and ensuring transparency by identifying the true beneficial owners is critical to maintaining corporate integrity and complying with FinCEN’s reporting requirements.