Yan from Owner.One
Once upon a time, you entrusted part of your wealth to a relative, former classmate, or just a trusted person, making them the formal owner to conceal your involvement. Both of you were relatively young, but as the years went by, your wealth grew, along with social obligations. Now, both of you have families, children, perhaps remarriages, and different life changes, like acquiring new citizenship. The asset you entrusted them with is no longer entirely yours. If something happens to them, their family may take priority over you, and you could end up with just half, or even one-eighth, of your factory, which they officially own. And if they’ve acquired problematic citizenship, such as U.S. citizenship, returning the asset to you could trigger significant taxes. Does your proxy have a prenuptial agreement? If it’s in your favor, it might not help much in practice, but if it favors their family, it becomes your problem. Do they have large loans with personal guarantees or risks of subsidiary liability? The list of potential complications goes on. In many cases, such arrangements are perfectly legal. However, legality doesn’t eliminate the issues described above. Talk to your proxy, assess their situation across all risk zones, model potential consequences, and prepare the necessary documents to protect your interests. This note doesn’t cover official managers with formal management agreements. That’s a topic for another note.