Can I make someone I dont know as director of my ltd company

[NotAllThere]

Oh dear

Are you a sockie ?

Tell the agency he won't be a director. End of.

Just a reminder that if you suspect a poster is a sockie please report to the moderators. Do not call out here. I've checked - not a sockie.

[MrMarkyMark]

Either do it to help the contractor out, done this countless times, its good for my network.
I have also had people do this for me, on at least 4 occasions.

I can ask agency to pay me continuous referal fee and deal with candidate directly

This could fly and is probably the cleanest, but you would have to invoice the agency for it.

A friend of mine used to get the contract in the other contractors LTD name, who then reimbursed them with the margin.
A lot of trust in this approach and the contractor would obviously know the margin.
However, as things were made clear at the start my friend never had any issues with this.

[billpay]

I helped few in the past and few helped me as well and even now if nothing works out then I will leave him to use agency directly

Nothing wrong in doing business so thinking of doing in business line also,I also dont mind in future if someone wants to do similar thing with me

[MrMarkyMark]

I helped few in the past and few helped me as well and even now if nothing works out then I will leave him to use agency directly

Nothing wrong in doing business so thinking of doing in business line also,I also dont mind in future if someone wants to do similar thing with me

Ah, I certainly wasn't being critical .

My friend had a bit of a USP, in any case, as if the contractor scored extra work, and / or got someone in for a role, they got a % too.
Most people seemed more than happy with the arrangement, then the recession hit.

[JRCT]

Is there an issue if I make the contractor (who is not my friend) as director of my ltd company

I can set up a new ltd company where me and my friend will be directors

Are you my 4 year-old daughter?

[ASB]

There are quite a few implications. It doesn't make too much difference to those if they happen to be a director or not. The agency will have their own commercial reasons why they are only prepared to deal with directors, some of them may even be valid but ultimately it is their choice.

Trying to "do someone a favour" and profit it commerically is fraught with possible problems. How much are you going to pay them ?

Of course you need to factor in:-

- Employers NI
- Mandatory holiday pay
- Employers liability insurance
- Maternity pay
- Paternity pay
- Workplace pension
- Legal consequences on the company as a result of their actions

I think they might be disappointed when their 400 day rate (or whatever) turns into a salary 2/3 that (or thereabouts).

You could mitigate some of the risks of holiday pay etc by paying NMW and a profit related bonus. Though this may be getting more difficult.

Of course you can only pay them paye for everything. No dividends. Unless of course you choose to allow them to buy some shares. But that too poses difficulties. If they have half the shares they get half the dividends unless you look at differing share classes. Which can be another can of worms of course.

If you want to start placing people that's absolutely fine. But being an employer carries significant, and potentially costly, obligations. If you are just trying to think "bit of a windfall for being in the right place at the right time" then come to an arrangement with them and invoice them an agreed finders fee.

There could be legal issues with being paid from the agency some sort of ongoing commissions. It smells a bit like charging people to find them work which is generally a non starter.

[billpay]

Ah, I certainly wasn't being critical .

My friend had a bit of a USP, in any case, as if the contractor scored extra work, and / or got someone in for a role, they got a % too.
Most people seemed more than happy with the arrangement, then the recession hit.

I know you were not being critical

[billpay]

There are quite a few implications. It doesn't make too much difference to those if they happen to be a director or not. The agency will have their own commercial reasons why they are only prepared to deal with directors, some of them may even be valid but ultimately it is their choice.

Trying to "do someone a favour" and profit it commerically is fraught with possible problems. How much are you going to pay them ?

Of course you need to factor in:-

- Employers NI
- Mandatory holiday pay
- Employers liability insurance
- Maternity pay
- Paternity pay
- Workplace pension
- Legal consequences on the company as a result of their actions

I think they might be disappointed when their 400 day rate (or whatever) turns into a salary 2/3 that (or thereabouts).

You could mitigate some of the risks of holiday pay etc by paying NMW and a profit related bonus. Though this may be getting more difficult.

Of course you can only pay them paye for everything. No dividends. Unless of course you choose to allow them to buy some shares. But that too poses difficulties. If they have half the shares they get half the dividends unless you look at differing share classes. Which can be another can of worms of course.

If you want to start placing people that's absolutely fine. But being an employer carries significant, and potentially costly, obligations. If you are just trying to think "bit of a windfall for being in the right place at the right time" then come to an arrangement with them and invoice them an agreed finders fee.

There could be legal issues with being paid from the agency some sort of ongoing commissions. It smells a bit like charging people to find them work which is generally a non starter.

all your list is applicable if I make my friend as employee, but I will do this

I will start a new company with 100% share with me and I am director and my frend is director
Contract between agency and this ltd company and money paid into ltd company bank account
I will issue a sub contract between new ltd company to his own ltd company
He will raise invoice to me and I will pay him accordingly

He would probably know my margin but that is ok

If anyone knows any issues please let me know, dont just say it is not right or no one would do. I spoke to two accountants and both said this is fine

Please provide constructive feedback

[stek]

all your list is applicable if I make my friend as employee, but I will do this

I will start a new company with 100% share with me and I am director and my frend is director
Contract between agency and this ltd company and money paid into ltd company bank account
I will issue a sub contract between new ltd company to his own ltd company
He will raise invoice to me and I will pay him accordingly

He would probably know my margin but that is ok

If anyone knows any issues please let me know, dont just say it is not right or no one would do. I spoke to two accountants and both said this is fine

Please provide constructive feedback

What's the point of all this?

[TestMangler]

What's the point of all this?

10% would be my guess