Ltd Co formation online, who to use and number of Shares to issue ??

[lnoton]

Hi all, something along a similar line.

I have recently set up my business with myself as a Director and my girlfriend as a Director also, as well as being the Secretary.

I am about to start contracting and Rachel (my girlfriend/other Director and Secretary) will start at some point in the next 6 months. We both work in IT.

Using eacbs I gave 1 share to myself and 1 share to her, leaving 998 left.

What does this mean when I come to pay dividends out? As she will not actually be working for the company (not yet anyway), other than doing some paperwork.

Will she also have to receive a dividend payout inline with what I get? I fear this might be breaking rules.

Any help would be much appreciated...i'll be lining up an account after the holidays but any info now would be much appreciated.

Cheers

[Sockpuppet]

Yes. You pay a dividend per share. So she will also have to get the same.

Hint of advice from sockpuppet:

While its all rosy now and you think you love each other she will at some point rip your heart out and tulip in the cavity that is left. She doesn't love you...not nearly enough. Be married for 20 years and I might think that its a good idea but it IS NEVER, NEVER, NEVER a good idea to have girlfriend as a shareholders.

Giving shares to someone who you think you are going to spend the rest of your life with is a seriously bad idea.

Business and personal lives do not mix period. While it may seem like a cool money saving idea to work through the same company its not. Keep your affairs separate so if you do break up its easier and you are not left holding parts of each others company.

Plus it makes it easier unless you bring in different amounts of money and you don't have to pay large sums of PAYE to one person etc to even out the dividends.

So in short. Women are evil get that share back before she kills your humanity and destroys your sole.

[VectraMan]

So in short. Women are evil get that share back before she kills your humanity and destroys your sole.

soul

Unless you're saying that he keeps fish?

I agree FWIW. However you don't have to keep using the same Ltd. if it all goes tits up - you can always start a new one. Better to have a company each in the first place though.

[lnoton]

We are both IT people that work building J2EE apps and the like. So we thought (with advice from other contractors) that setting up a company together would be suitable. As it is a strong case of showing capable substitution etc. However as I said my g/f will not start contracting until summertime. Seems a little crazy for us to both resign and contract at the same time. Either way I have now set up the company with us both as Directors and we have 1 share each and my g/f is the Com Sec.

Lets put the "dont trust women etc" aside, is there an issue with her taking money in the forms of dividends if she hasnt worked for the company? Its not as if its a tax incentive for us is it - as she already has a permie job in the higher tax bracket, therefore the dividends will be tax at the higher rate anyway.

My concern here is s660, any advise would be ideal. Yes she would happily give me my share back and resign as Director, I havnt started a contract yet so there is no money in the account. But it seemed sensible in a way to minimize paperwork etc.

[Gonzo]

I agree with Sockpuppet, although I am not that cynical about women.

Always, always, always keep finances separate. It is just one more thing that can go wrong if you don't.

Back when I was a permie and owed thousands on credit cards, the girlfriend of the time had just received a substantial inheritance and offered to lend me the money to pay off the cards. I had to explain to her why this was a seriously bad idea. I would not have been able to pay her back for a long time after we split up.

[lnoton]

I agree with Sockpuppet, although I am not that cynical about women.

Always, always, always keep finances separate. It is just one more thing that can go wrong if you don't.

Back when I was a permie and owed thousands on credit cards, the girlfriend of the time had just received a substantial inheritance and offered to lend me the money to pay off the cards. I had to explain to her why this was a seriously bad idea. I would not have been able to pay her back for a long time after we split up.

Well there is no lending of money to anyone, and we're no doubt going to get engaged soon...so then it doesn't matter either way if she has a share or not. She'll get half if we break.

Anyway I'm not asking for advice re: having partner as a Director (she can earn well over 50k herself as a permie and has plenty of money...she has little interest in taking anything from me. In fact she is better off at the mo.) Im more interested in s660.