This is trust concept that arises where a party (Principal) appoints or nominates another person (Nominee) to act in his stead. Such a Nominee enjoys all the rights and liabilities of the Principal.

To protect the agreement establishing the relationship between the Principal and his Nominee, both parties usually enter into a trust relationship, which is not known to third parties. The Agreement entered into by both parties thereby regulates the rights, powers and liabilities of the Nominee as the Trustee of the Principal.