A somewhat liability contract?

[joshlim.718]

Hello everyone,

I'll be registering a company overseas (it's in Singapore/Asia)

As the company registration for their country requires the director to be local resident, my relative was willing to "borrow" me his name for it but his one concern is that will he get into any problems if the company gets sued/fined for whatever reasons.

Is there a common/standard contract out there for such situation? Whereas it states my relative will just be a "name" and will play no role in the business, should there be any problems whatsoever with the company - it should not affect him but instead directed to me.

If there is such a contract, can you let me know whats the name of such contract or better still direct me to one. I figured it'll be more cost efficient if I can have a premade contract and then getting it amended by my attorney.

Hope you guys can help me out..

Kind regards,
Josh Lim

[windroadtosuccess]

You can incorporate your business, meaning that neither of you can get sued of your personal assets

[joshlim.718]

Hi thanks for the reply, I'm opening an advertising firm so really there isn't much risk of getting sued etc but as my relative isn't business savvy he worries he might get into some form of trouble as he is the owner by name of the company.

[GlobalWealth]

Litigation is always a risk. Usually when and where you least expect it. Incorporate. It will let you sleep at night and you will likely get tax benefits as well.

[joshlim.718]

Hi there,

Sorry for missing this out, I am in fact incorporating my company (private limited).

Even under incorporating, the director may still faces risk/debts etc should the company gets sued/fined right?

If yes then it'll bring me back to my original question of addressing my relative's concern as he worries he might get into some form of problems/trouble borrowing me his name for the company incorporation.

Is there such an agreement we can establish so I can give my relative a form of assurance that if something goes wrong, he will not be in any problems but instead the problems will be directed to me.

[GlobalWealth]

Hi there,

Sorry for missing this out, I am in fact incorporating my company (private limited).

Even under incorporating, the director may still faces risk/debts etc should the company gets sued/fined right?

If yes then it'll bring me back to my original question of addressing my relative's concern as he worries he might get into some form of problems/trouble borrowing me his name for the company incorporation.

Is there such an agreement we can establish so I can give my relative a form of assurance that if something goes wrong, he will not be in any problems but instead the problems will be directed to me.

The director should have no personal liability in regards to the operation of the business. However, the business is at risk from the activities of the director(s). I would dig a bit deeper into the local laws. In most countries you can have a local "registered agent" which allows foreigners to open and operate a business without a local partner.