Our nominee director arrangement is now the problem.

Cheap nominee arrangements are sold as privacy and function as a liability. Banks resolve beneficial ownership as a condition of onboarding, so an undisclosed nominee is discovered at the first review, and an incomplete or contradicted ownership declaration is treated as misrepresentation rather than as an oversight, which is a far worse starting point than the disclosure would have been.

The mechanics create their own exposure. A nominee who signs without instruction, or a mass-market nominee holding hundreds of directorships, cannot demonstrate the directed management most jurisdictions and banks now expect. Declarations of trust drafted loosely may not be enforceable where the entity sits. Where the nominee holds shares, the real owner's title depends entirely on that document, and where the nominee is also a signatory, the owner's control of the account depends on someone with no stake in the business.

Public beneficial-ownership registers and automatic information exchange have largely removed the original benefit. In most cases the arrangement now conceals nothing from authorities while still complicating every bank review and audit.