Little tip on how to run your IBC in a proper, safe and smart manner!
By default, clients, who order full management IBC, tend to get Power of Attorney (POA) with it. Why? Mainly in order to operate bank account associated to this company. And sure, how else would they manage the moneys in there, right?! Fair enough, this is common knowledge after all.
When you have an IBC, which is managed by nominee director, you cannot access bank account just like that, you need either POA (granting you the rights to operate bank account) or Bank Account Signatory (BAS) service (granting the account signatory right to our professional, who is either your company individual nominee director, or a party from the company, which is your corporate nominee director).
POA = legal document, which confers the operational and representative rights in the IBC to a particular person. E.g., in this case gives you (the beneficial owner of IBC) the right to operate your company accounts.
BAS = is an individual, who has signatory rights in the bank account. These rights are granted by a Company Mandate, which basically is a special resolution, determining the fact that company shall open a bank account and along with that granting the account signatory rights to someone. Subsiquently this signatory is the one who can execute transfers, sign cheques and otherwise dispose with the money on the account.
Here you have two options
1. Easy - POA
2. Safe – BAS service
When you decide to have your company managed professionally, you have to take into consideration that there will be extra disbursements in any way. POA you need to renew every year, BAS service is annual service. So money well spent or wasted, up to you!
IF your nominee director manages your company’s bank account, it is safe and for tax purposes makes your company look like it is run from where it is located. While usage of POA arouses certain risks. If tax authority is investigating your company and you are routinely using POA, they can argue that you in fact are running the company! These are the two concepts that tax man follow! One is known as “mind and management”, the other - “location of the transaction for tax purposes”.
When using BAS service, you can still have monitoring rights to follow up what’s happening in your accounts, but when it comes to transfer executions, it is much safer to have these done by the actual director of your company!
Thank you for reading my post! And you are welcome to leave comments, feedback, suggestions for other posts or contact me for more information.
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