Power of Attorney vs Nominee: When a POA Creates a Nominee

The agency that is not the nominee. The scope: the specific acts — signing the filings, representing at the meeting, executing the transfer — the authority bounded. The holder: the shareholder remains the holder — the POA does not move the shares or the votes. The instructions: the attorney follows the grantor's directions for the acts — the normal agency. The UBO effect: none — the grantor's ownership assessed directly; the attorney is not in the cascade. The disclosure: the POA filed where required (the authority filings, the bank's records) — but not the nominee register. The lesson: the everyday POA — the manager's signing authority, the adviser's filing authority — is the business tool, not the nominee arrangement. The nominee analysis is not triggered by the mere existence of a POA.

The substance test applied. The general POA: the authority to exercise all shareholder rights — vote, dividends, disposal — the attorney as the de facto shareholder. The enduring POA: the indefinite, irrevocable authority — the grantor permanently removed from the exercise. The economics: the attorney receiving the benefits — the dividends paid to the attorney's account. The control: the attorney directing the company — the board taking the attorney's instructions. The conclusion: the POA conferring the substance of ownership is the nominee arrangement — the grantor the nominator, the attorney the nominee. The disclosure: the nominee register entry — the POA as the evidence. The lesson: the POA's label never controls — the rights conferred determine the classification. The general, enduring, economic POA is the nominee arrangement by another name.

The classification discipline. The review: each POA conferring shareholder rights — reviewed against the substance test: which rights, for how long, with what economics. The documentation: the classification recorded — 'POA dated X: limited signing authority — not a nominee arrangement' or 'general POA conferring voting and dividend rights — disclosed as nominee arrangement'. The borderline: the broad POA with the limited exercise — classified on the rights conferred, not the rights used. The update: the POA's scope changing — the reclassification and the 15-day update. The bank: the POA disclosed to the bank in any case — the KYC recording the authority. The lesson: the POA portfolio reviewed like the shareholder register — each authority classified, the nominee-POAs disclosed, the line drawn on the substance of the rights.

Decision No. 109 of 2023 treats nominee arrangements as a disclosure event, not a structure to hide behind. A manager or board member who acts as a nominee board member must inform the legal person of that fact and provide the Article 10 data within 15 days of becoming a nominee; anyone who already held that capacity when the Decision was promulgated had 30 days from promulgation to disclose. Any change to the disclosed data must be reported within 15 days, and ceasing to be a nominee must be reported within 15 days of cessation. The details of Nominal Board Members are included in the Partners or Shareholders Register. The commercial risk runs the other way too: an undisclosed nominee arrangement leaves the register wrong, which is a violation in its own right, and it breaks the chain a bank, auditor or buyer needs when they verify who controls the company. Professional nominee services remain lawful; what the Decision prohibits is the nominee whose existence the company does not record.

A register entry is only as good as the evidence behind it. For each natural person, keep: a passport copy (or national ID) showing number, issuing state, issue and expiry dates; proof of address for the residence or notice address; and the ownership evidence — share certificates, the memorandum and articles, shareholder agreements, trust deeds, nominee agreements — that proves the grounds on which the person qualifies. For corporate shareholders, keep the full ownership chain: each layer's register extract or certificate of incumbency, up to the natural persons, with an ownership chart the company can actually explain. Foreign documents typically need attestation (home-country notarisation plus UAE embassy legalisation or apostille, as the authority requires) and Arabic translation where the registrar works in Arabic. Review the file on a schedule — passport expiries and address changes are the commonest reason registers drift out of date — and keep superseded documents: the register records history, including when each person ceased to be a beneficial owner.