Panama papers: jargon buster

What you need to know about the terminology

 

Ultimate beneficial owner, beneficial owner, beneficiary

The person who is the true owner of a company and/or a bank account. In the offshore world, the identity of beneficial owners is often kept secret.

Nominee directors

Stand-ins who control a company on paper but exercise no real authority over its activities.

Nominee shareholder

A person who is listed as a shareholder on a company’s documents but has no real power over the company or claim to its assets. This is common practice in offshore financial structures to hide the identity of the real owner.

Intermediary

A go-between for someone seeking an offshore corporation and an offshore service provider -- usually a law-firm or a middleman that asks an offshore service provider to create an offshore firm for a client.

Power of attorney

Authorisation given to a person to represent the offshore company. It can confer rights that include managing the company without any limitation, carrying out contracts, purchasing products and borrowing or lending money. Each authorization notes which powers are granted to the person who will act on behalf of the company and whether they are general or specific.

Bearer shares

Whoever physically holds a certificate of shares is considered the owner of the shares. Bearer shares provide one of the deepest levels of secrecy. Many countries have banned bearer shares because they are considered a facilitator of tax evasion and money laundering.