|
There are a number of elements in every corporation,
each with its own purpose and function. In the case
of an offshore corporation, many of these functions
are filled by what are called "nominees",
which are typically provided because they have some
special skill or attribute in carrying out their function
that the incorporator does not have.

Most offshore jurisdictions require you to maintain
a registered agent within their territory. The name
and address of the registered agent are put into the
articles of incorporation so that the company can
receive important correspondence such as legal notices
and tax documents

A company director is charged with making all material
decisions about the company and its business. In the
case of a holding company, this often amounts to nothing
more than an annual signature. Directors are initially
appointed by the incorporator, and then elected by shareholders
annually. All the directors together comprise the company's
Board of Directors. Offshore companies are required
to name at least one director, sometimes more. This
director can often itself be a corporation, which is
sometimes preferred since it offers an extra degree
of confidentiality. Sometimes it is required that one
or more directors must be resident in the jurisdiction
of incorporation, but this is rare, and is principally
dealt with though appointment of a local nominee.

A Company's officers fill various managerial and administrative
roles within the company, and are usually appointed
or elected by the board of directors. The most common
officer categories include President, Vice-President,
Treasurer and Secretary. Some jurisdictions require
that some, or all of these roles be filled, and may
require certain officers to be local residents. Again,
in these cases, positions are usually filled by a local
nominee.

The company manager is the individual or corporate entity
responsible for the ongoing management of corporate
activity and assets. Appointed by the Board of Directors,
the manager typically maintains signing authority on
all bank and brokerage accounts and normally receives
a corporate credit card. Since they 'manage' the activities
and assets of the company (bank accounts and brokerage
accounts, and insurance policies), the manager is also
responsible for making investment decisions.

Offshore corporations, like onshore corporations, use
"shares" to reflect their ownership. Shares
are units representing interest in a company, conferring
certain rights and liabilities in the owner. The rights
and liabilities attached to a share may vary significantly
depending on the "class" of share (i.e. common
or preferred) and the characteristics of those shares
as set out in the company bye-laws.

Authorized share capital is the total number of shares
that a company has available to issue existing and prospective
shareholders. This number can often be changed by resolution
or by amending the company's articles. Most jurisdictions
have a minimum required authorized share capital, and
the share capital
selected normally affects annual government fees payable.
Each jurisdiction has a standard number for authorized
share capital that keeps annual government fees at a
minimum.

Issued share capital is the number of shares from the
authorized share capital that have actually been issued
to shareholders in the corporation. Thus, if company
ABC has an authorized share capital of 50,000 common
shares, and 1000 have been issued to Joe, then
the company's issued share capital is 1000 shares. Joe
owns 100 percent of the company. If the company also
issues 1000 shares to Mary, the company's issued share
capital is 2000, and each of Joe and Mary own 50 percent
of the company (1000 shares each of the total issued
2000).

Every company files a copy of it's Memorandum and Articles
of Association, or "articles" with the local
corporate registry upon incorporation. They can be
extremely brief or very detailed, and they lay out some
general information about the company, it's registered
agent, the company objects, and the initial list of
directors and officers. There is typically a standard
and broadly drafted set of articles in every
jurisdiction that allows a company to do virtually anything
allowed by local corporate law.
|