Why do people start companies using another person's name?

Bombul

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I've seen some instances of it (can't say where and when), and the person (A) has gotten another person (B) on board who has no ties to the company. B is named as the majority shareholder in the company, while A is not named at all. B is completely uninvolved but is related in some unseen way with A, while A will probably run the company. There might be 1 or 2 other minor shareholders in the company (let's call them C and D).

What is the purpose of doing it in such a way? Is it of some benefit to A? How will this impact C and D?

And is it illegal to do so?

Please pm me if it is not convenient to share this information on the forum.

Thanks!
 

Perisher

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I'm just wondering if this should be on money mind...
 

jjcc888

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I may be able to help shed some light here :)

A is most probably a bankrupt [under some legal incapacity] or have certain personal/valid reasons not to appear as a 'front-liner' there

Copied over from https://www.mlaw.gov.sg/content/io/...or-bankrupts/information-for-bankrupts11.html


Responsibilities and Rights of a Bankrupt

3. Managing a Business or Becoming a Director

(a) Can I manage a business or a corporation?

You may apply to the High Court or to the Official Assignee for permission to:

i. Manage or take part in any business under the Business Registration Act (Chapter 32); or

ii. Act as director or take part in or to be concerned in the management of any corporation (Singapore or foreign company) under the Companies Act (Chapter 50).


(b) How can I apply to manage a business or corporation?

Please download and submit this application form together with the supporting documents indicated on the application form to the Official Assignee.


(c) What are the factors taken into consideration when reviewing my application to manage a business or corporation?

Each application will be considered on its own merit. The Official Assignee will take into consideration a number of factors including:
•the cause of your bankruptcy;
•your conduct before and during bankruptcy;
•your previous involvement in the business or corporation;
•the nature and viability of the proposed business or corporation;
•the nature of your involvement in the business or corporation;
•the benefits to your creditors from your involvement in the business or corporation;
•the risk of you incurring more debt from running the business or corporation.

The Official Assignee may refuse the application or approve the application subject to conditions she may impose. Such conditions may include requesting that you maintain proper accounting records and make regular payments to the Official Assignee from the income or profits of the business or corporation for the benefit of creditors.


(d) How do I find out the status of my application to manage a business or corporation?

You may access the e-services portal (Individual Insolvency Administration Information) at our website and obtain the information at no charge.
 

Bombul

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Hi jjcc888, I will drop you a pm as there are some details which should remain private.

If anyone has knowledge on this subject matter, especially legal/accountancy related, feel free to PM me.

Thanks guys!
 
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