Nominee

Key Highlights

• A nominee is a person who is appointed or chosen to act on behalf of another person.

• Nominees are often used in the financial sector, where they allow individuals and companies to hold assets such as stocks, bonds, and other securities in a convenient and efficient manner.

What is Nominee?

A nominee is a person who is appointed or chosen to act on behalf of another person. They have the legal authority to represent the other party's interests and act in their stead. Nominees are often used in the financial sector, where they allow individuals and companies to hold assets such as stocks, bonds, and other securities in a convenient and efficient manner.

Overall, the use of nominees allows for the efficient and convenient holding of property on behalf of others, while still protecting the rights and interests of the beneficial owner.

Why it Matters?

• Makes it easier and faster to transfer assets to family or beneficiaries after the owner’s death.

• Reduces hassle for loved ones by simplifying the process.

Key Points

• Role: The nominee safeguards assets and ensures they go to the rightful heirs, as per the owner’s wishes or the law.

• Common uses: Often set up for bank accounts, insurance policies, investment portfolios, or demat accounts.

• Eligibility: Usually close family, but some places allow multiple nominees with specific shares.

• Revocability: The owner can update or remove the nominee anytime.

Nominee Vs Beneficiary/Legal Heir

The nominee is just the person named to handle the assets initially.

The legal heirs - determined either by a will or inheritance laws - are the ones who ultimately take ownership.

Nominee in Finance and Securities

A nominee can also be a person or company holding securities (like stocks) for the real owner, often used by brokers to keep client assets safe and separate from their own.