How to remove a wife shareholder from a limited company?

[TheCyclingProgrammer]

If the company purchases these back is the cost tax deductable?

No.*

There's an overview here:
Share buybacks for private companies | Morton Fraser | Edinburgh and Glasgow | Lawyers | Estate Agents | Wealth Managers

In short, if the company bought the shares back (effectively making the other shareholder the 100% shareholder) it would have to be out of capital or retained profits.

OP should really speak to their accountant regardless, but especially if they want to go down this route to make sure everything is done correctly.

*though I suppose it is still tax efficient compared to another shareholder having to personally buy and fund the purchase from their own post-tax income.

[BrilloPad]

FTFY


And if you haven't got a bloody accountant divorce lawyer, you're going to need one PDQ.


BrilloPad may be able to give you advice on the next steps.

Divorce. FRom the latin to rip out a mans testicles via his wallet.

Start a new company. But it won't save you. I hope for your sake you have no children.

[mickael28]

Get her to sign a share transfer form transferring them back to you. Accountant can provide you with this. In reality it's a very straightforward process, but as others have said the trick is how do you approach this with her?

I went through this earlier in the year but we had already separated by that point and things were amicable so it was done without any grief. If you wanted to go down the more subtle (perhaps devious) path then setting up another LTD that you own 100% of and moving your current contract across is possible. In theory you could run down the funds in the old LTD and then just use the new one.

Obviously if you end up getting divorced it doesn't really ringfence any of the assets as they're still yours and therefore also a shared marital asset but that's a different discussion.

Thanks all, really useful answers, most of them (I know I can talk to my accountant, but I want to have an idea about the process before as my wife talks to her as well and I don't want to start getting things moving before fully needed).

I didn't understand the part that company assets are not ringfence against divorce? I thought a company was a different entity all together, and that was one of the reasons of working via limited companies. Otherwise, what's the point/difference between just leaving things as they are (and she'll get 50% of the assets in the company), or see if I can transfer the shares back to me and then have to give her 1/2 of 100% anyway?

Are we saying that assets are not ringfence in all cases in a divorce situation?

[Cirrus]

Otherwise, what's the point/difference between just leaving things as they are (and she'll get 50% of the assets in the company), or see if I can transfer the shares back to me and then have to give her 1/2 of 100% anyway?

That's kind of my feeling. She'll get 50% quite likely so no point in shuffling it around.

[Lance]

Are we saying that assets are not ringfence in all cases in a divorce situation?

For that you need a divorce lawyer.
I wouldn't have thought so. If you own the company 100% it's still your asset and she is therefore entitled to some claim to it.

[Lance]

That's kind of my feeling. She'll get 50% quite likely so no point in shuffling it around.

I think you're right.
I also pointed it out in my 1st post to this thread


"If you do get a divorce the company will likely be part of a settlement anyway so she's likely to get a chunk of it (around half I reckon) anyway."

[northernladuk]

That's kind of my feeling. She'll get 50% quite likely so no point in shuffling it around.

She won't get 50%. She already owns 50% so has already got it surely.

[Bee]

Hello,

My wife has been a shareholder on my ltd company for around 3 or 4 years on a 50:50 basis, with me being the only director. Things have not been going well for quite a few months and one never knows. Just to get some information before is too late, how can one remove a shareholder in this situation from the limited company?

Is it just a matter of both of us signing a paper and sending it to my accountant or similar? If so, which paper would that be to have a look?

Thank you!

It depends on your marital regime.
Find a lawyer expert in this area.

[northernladuk]

It depends on your marital regime.
Find a lawyer expert in this area.

Useful input thanks.

[ASB]

Thanks all, really useful answers, most of them (I know I can talk to my accountant, but I want to have an idea about the process before as my wife talks to her as well and I don't want to start getting things moving before fully needed).

I didn't understand the part that company assets are not ringfence against divorce? I thought a company was a different entity all together, and that was one of the reasons of working via limited companies. Otherwise, what's the point/difference between just leaving things as they are (and she'll get 50% of the assets in the company), or see if I can transfer the shares back to me and then have to give her 1/2 of 100% anyway?

Are we saying that assets are not ringfence in all cases in a divorce situation?

Like basically everything you both own the shares in the company are marital property. Check the matrimonial causes act.