Entrusted Shareholding Agreement Template for Australia

The Entrusted Shareholding Agreement is essential in situations where there is a need to separate legal and beneficial ownership of company shares under Australian law. This arrangement is commonly used in various scenarios including foreign investment structures, family business arrangements, or corporate group restructuring. The agreement ensures compliance with the Corporations Act 2001 (Cth) and ASIC requirements while clearly defining the rights and obligations of both the nominee shareholder and the beneficial owner. It covers crucial aspects such as voting rights, dividend handling, and share transfer procedures, making it a vital document for maintaining clear records of beneficial ownership and ensuring proper corporate governance.

1. Parties: Identification of the Entrusting Party (beneficial owner) and the Nominee Shareholder

2. Background: Context of the arrangement, including details of the company whose shares are being held

3. Definitions: Key terms used throughout the agreement, including 'Entrusted Shares', 'Beneficial Owner', 'Nominee Shareholder'

4. Appointment and Declaration of Trust: Formal appointment of the nominee and declaration of trust over the shares

5. Rights and Obligations of the Nominee Shareholder: Detailed responsibilities of the nominee, including voting rights, dividend handling, and record-keeping

6. Rights and Obligations of the Beneficial Owner: Powers retained by the beneficial owner, including right to dividends and directing the nominee

7. Share Transfers and Dealings: Restrictions on transfer of shares and process for authorized transfers

8. Voting Rights and Instructions: Process for giving and following voting instructions

9. Dividend and Distribution Arrangements: Handling of dividends and other corporate distributions

10. Costs and Expenses: Allocation of costs related to the arrangement

11. Termination: Circumstances and process for ending the arrangement

12. Governing Law and Jurisdiction: Specification of Australian law as governing law and jurisdiction for disputes