50:50 Shareholders for contract company

**northernladuk** · 28 August 2019, 21:20

50/50 seems to be the standard advice for maximum efficiency and I'm sure if there were problems with getting gigs with this set up they'd be very well documented.. but there isn't anything out there.

That said I do remember seeing the odd thread on here about agencies insisting the contractor is the sole director. This is the only one I can find and it's very old so maybe agents have gotten their head round it by now.

https://www.contractoruk.com/forums/...rship-ltd.html

The lack of evidence would suggest it's not a problem.

**northernladuk** · 28 August 2019, 21:23

But I have seen plenty of threads from contractors going through a divorce asking how they can save half the money in their business, which they couldn't

**ladymuck** · 28 August 2019, 21:25

I have had agencies check for sole ownership. Tek did it a while ago for a gig I was going for. I am the sole shareholder so I didn't give it much thought at the time (didn't get the gig). But I would challenge the logic behind such a question if it arose again.

**wattaj** · 29 August 2019, 08:50

My understanding is that is is better to be a majority shareholder (even 51/49) just in case things go wrong and one needs to make executive decisions about the company's future... and by "things go wrong" I, of course, mean the unexpected introduction of an [ au pair | tennis coach | Russian hooker ] into the family dynamic.

HTH.

**northernladuk** · 29 August 2019, 09:49

Originally posted by wattaj View Post

My understanding is that is is better to be a majority shareholder (even 51/49) just in case things go wrong and one needs to make executive decisions about the company's future... and by "things go wrong" I, of course, mean the unexpected introduction of an [ au pair | tennis coach | Russian hooker ] into the family dynamic.

HTH.

I remember Simon Dolan mentioning this many years ago and I remember a couple of other threads where this is suggested. There was no real tangible reason that would make it standard advice so the message has gotten lost in the raft of articles about 50/50 being most efficient. If I did ever go down this route I'd personally go for an uneven split because it feels more representative even if no one can give me a rock solid reason why not.

**DeludedKitten** · 29 August 2019, 13:14

Originally posted by 2bFrank View Post

My wife has a nail business and will use my company to trade with as well as me using it for contracting to save money.

Unless the nail business is already VAT registered this is a really bad idea - she'll either have to put prices up or take a 20% cut to stay where she is in what could be a pretty price-sensitive market.

Been there, done that, with my partner. Didn't work out as she was having to absorb the VAT in her prices and barely broke even.

**Lance** · 29 August 2019, 13:58

Originally posted by DeludedKitten View Post

Unless the nail business is already VAT registered this is a really bad idea - she'll either have to put prices up or take a 20% cut to stay where she is in what could be a pretty price-sensitive market.

Been there, done that, with my partner. Didn't work out as she was having to absorb the VAT in her prices and barely broke even.

add to that.... what sic code would you use?
Sounds very messy.

My thoughts would be
- wifey stays as a sole trader
- provide wifey with sufficient shares so that as the OP gets to the higher rate band so does wifey. This might be 50/50 if she earns around the £8.5k mark, or a reduced shareholding if she earns more.

Of course an accountant would help with this, including the company setup and intitial share distribution..... NLUK has three posts already and not suggested an accountant..... Is he poorly?

50:50 Shareholders for contract company