Shareholders??

[DanTheMan]

Hi,

I'm a first-time contractor and was advised by my accountant to set up as a limited company. I've done this but for some reason I had to name a shareholder who owned at leats 1 share worth £1.

I stuck in my father as the shareholder but was wondering what effect this actually has and, if the effect is substantial, whether I can name myself as the shareholder... can I give myself 100% of the shares??

Thanks for any advice.

[css_jay99]

Actually I have a question along these lines as well sorry to hijack this thread.

I had my Ltd company set up with 10 Ord shares of £1 each me and bi**h Ex wife took 5 shares each.

I have already fired her as company secretary

questions are :-

1) As orig poster, Can i become the only share holder owning all 100% ?
2) If possible, what papers do I need to fill out to reflect this ?

3) How the heck do i pay myself dividends and document the necessary paperworks ?


css_jay99

[DaveB]

Hi,

I'm a first-time contractor and was advised by my accountant to set up as a limited company. I've done this but for some reason I had to name a shareholder who owned at leats 1 share worth £1.

I stuck in my father as the shareholder but was wondering what effect this actually has and, if the effect is substantial, whether I can name myself as the shareholder... can I give myself 100% of the shares??

Thanks for any advice.

The effect is very substantial if you intend to operate on a minimal salary + dividend model, the most tax efficiant way of doing things.

You must, and can only, pay dividends to a shareholder, in proportion to the number of shares they own. So if your ltd pays a dividend 100% of it must go to your father. And no, he cant then give you the money. Thats called Tax Evasion and you go to jail for it. If your accountant is not telling you these things then get a new one, pronto.

[Ardesco]

Actually I have a question along these lines as well sorry to hijack this thread.

I had my Ltd company set up with 10 Ord shares of £1 each me and bi**h Ex wife took 5 shares each.

I have already fired her as company secretary

questions are :-

1) As orig poster, Can i become the only share holder owning all 100% ?
2) If possible, what papers do I need to fill out to reflect this ?

3) How the heck do i pay myself dividends and document the necessary paperworks ?


css_jay99

You would have to pay your wife for the shares she owns, you can't just take them away. I don't think you can force her to sell them, but I'm a bit hazy in this area (that's something I let the accountant deal with.)

I belive that if you start to pay yourself dividends you will also have to pay her a dividend as well so if you have 10 shares and pay yourself a dividend of £10,000 you will then have to pay her a dividend of £5,000 for her 5 shares.

Imagine if you spent £5000 on Barclays shares and one day they turned round and said, oh we don't want you to have them any more, we are just going to take them away....

Of course you could always just wind up the company and start another one.

***Edit***
Just thought I had better clarify that this is all from my current understanding, do not take this as gospel IANAL etc

[DanTheMan]

Cheers for the reply. The accountant advised that I pay myself by dividend but didn't say anything about having to name a shareholder at the time of forming the Ltd.

I'm still a little hazzy though. Can I just revoke this share seeing as my Father hasn't actually paid for it yet? Or can I just issue 99% of the shares to myself and then pay out a 1% dividend to my old man?

Lookinmg through postings about forming companies before I did this I didn't see anything about having to specify a share holder from the off set. It's no bigee if that 1 share has to stay out there but I'd quite like to avoid jail.

[Pondlife]

You could buy it from him for £1 I would have thought.

[DanTheMan]

Just been to the online company admin site at companies house. He was set up as an original subscriber. I'm not sure but I think I might be able to fill out an F88(2) and return the shares to the company (?) However, if an original subscriber was required at the company's formation surely I will still need to nominate another?

This is really bloody confusing and my accountant isn't in until 2pm. I don't mind paying a 1% divident seeing as it's only going to cost me £1 at the moment but I really don't want that to raise when the company starts (he said hopefully) to make money.

[DanTheMan]

Me again

I just found this:

The stock transfer form (J30) is used to transfer the original subscriber share to the new shareholder. If you wish to issue further shares up to the authorised share capital, form 88(2) should be completed and sent to the Registrar of Companies at Companies House. In the future it will be possible to do this on our website

I'm assuming that I can use the J30 to transfer the original subscriber share to myself?

[malvolio]

Yes you can - I di the same qa while back to get back to being the sole shareholder (when the other half finally broke the higher level tax barrier and there was no point in her having any extra).

However, GET A NEW ACCOUNTANT NOW!!! If he is not explaining things properly, and has got you to give away your shareholding to someone else, he needs shooting. And get him to sort out the share ownership before you do, then you can refuse to pay him for his crap advice.

[Nixon Williams]

Looks like you have the answers to your questions.

Yes you can be a 100% owner of the company and hence all the shares.

Assuming you have not traded yet you can complete the Stock Transfer Form. The company retains this, it is not sent anywhere.

The G88(2) form is to issue additional shares and this is filed at Companies House.

The first Annual Return from Companies House (sent after the first anniversary) will ask for you to list the shareholders.

To deal with the other point - there can be possible issues with transfers if the company has been trading for a while, and you should speak to your accountant for further advice. Transfers between husband/wife who live together are exempt from Capital Gains Tax.

I hope this helps.

Alan