New company a sensible option?

[FestiveFootwear]

Hi All,
Hopefully the mods will let me use this sock puppet for my question.....

Mrs FF and I own 50% of MyCo each. Mrs FF is the company secretary. We are considering splitting up .

The agency through whom I currently contract are reasonably friendly, and I expect a contract extension when the contract expires in February.

Given the above scenario, is the best solution to finish up the existing contract, wind up the company with 2 directors, and start a new one with myself as the only director, and have the agency issue a contract to the new Ltd?

Is there any reason that this might fall foul of the phoenixing rules?

I would probably register the company with my accountants as the registered address.

Anything else I've obviously missed?

Regards...

FF

[SueEllen]

If your soon to be ex is co-operative you could buy the shares of her, and at the same time make her resign as company secretary.

You just need to hold a board meeting to pass all these resolutions through, do the share paperwork, inform your accountant and up date companies house with the directors. Updating companies house can be done online and when I had a director who resigned doing it was free.

If your accountant or whoever set the company up was sensible each share would have a price of between a penny and a pound.

[Waldorf]

No problem with phoenixing if you do not take advantage of the MVL rules. Just pay out the profits as dividends and close the company. Your accountant can sort this out for you.

Might be a good time to move accountants if you are not happy, plenty do it for a good price, but too many charge too much and rip you off for super profits and low quality staff.

[Waldorf]

If your soon to be ex is co-operative you could buy the shares of her, and at the same time make her resign as company secretary.

You just need to hold a board meeting to pass all these resolutions through, do the share paperwork, inform your accountant and up date companies house with the directors. Updating companies house can be done online and when I had a director who resigned doing it was free.

If your accountant or whoever set the company up was sensible each share would have a price of between a penny and a pound.

CGT exemption will only be allowable if you are married and still living together.

[SueEllen]

CGT exemption will only be allowable if you are married and still living together.

They are considering splitting up so if actioned now it will be the next tax year when they have split up. Plus if the shares are worth a penny and there are a 100 of them in total it's not going to cause too many CGT issues.

[ASB]

A reasonable value for each share is their proportion of the retained profits rather than their par value.

in any event, irrespective of nominal ownership they are marital property and should be treated as such in the settlement if it comes to that.

it shouldnt make any effective difference whether a new company is formed or not. A new company gives certainty and simplicity at the cost of a possible cgt issue.

[NotAllThere]

Hi All,
Hopefully the mods will let me use this sock puppet for my question...

No problem.

[FestiveFootwear]

A reasonable value for each share is their proportion of the retained profits rather than their par value.

That was what I thought too. To be honest, I thought closing down the company, distributing retained profits and spinning up a new separate entity would minimise the potential problems. I can do that before we split in any case I guess (just in case).

Is there any reason I shouldn't do this?

[ASB]

That was what I thought too. To be honest, I thought closing down the company, distributing retained profits and spinning up a new separate entity would minimise the potential problems. I can do that before we split in any case I guess (just in case).

Is there any reason I shouldn't do this?

I guess it all depends on how the split goes. Also what your overall financil position is.

what I would do, if possible, is to get her to gift you the shares and factor that in to the overall settlement. You can of course agree whatever you want between yourselves. Individual negotuation or mediation can usually lead to a better and cheaper settlement. Obviously needs both parties to agree.

It cost me about 20k in legals to agree what I had originally proposed but my exs initial position was entirely unreasonable initially in my view.

[fidot]

Whether your wife has shares in the company or not, its assets will be taken into consideration for splitting.

So, in my opinion, creating a new company now doesn't help.