Transfer Shares.

[lnoton]

Hi,

I have a limited company with myself and girlfriend as a Director, the girlfriend is also the Secretary.

We both have 1 share each in the company. Can someone tell me how to either transfer her share to me, or how I can take an extra 9 shares out? Or something that means dividend pay outs are more in my favour. She works in a full time, higher tax band job.

When i formed the company there were 1000 ordinary shares, am i right in thinking that only 2 have been allotted?


Cheers,

[Sockpuppet]

Yeah. 1000 shares of authorised capital. 2 have been assigned.

AFAIK and IANAA but you could just recall the share to the company and make the company pay her a £1 for it.

[lnoton]

Yeah. 1000 shares of authorised capital. 2 have been assigned.

AFAIK and IANAA but you could just recall the share to the company and make the company pay her a £1 for it.

Cheers, as i remember we never injected £2 in to the company, nor £1000? How does it all work I ask? Should be and my girlfriend have paid for our single shares?

Any idea what forms i need to fill in? Do HMRC need to know, or just companies house?

I think i would prefer to simply take 9 more shares out and leave Rachel with a single share...she is the company secretary and does drive me to the station every morning!

[Sockpuppet]

Cheers, as i remember we never injected £2 in to the company, nor £1000? How does it all work I ask? Should be and my girlfriend have paid for our single shares?

Any idea what forms i need to fill in? Do HMRC need to know, or just companies house?

I think i would prefer to simply take 9 more shares out and leave Rachel with a single share...she is the company secretary and does drive me to the station every morning!

You should have paid the company £1 each for the share. This £2 then goes into Shareholders funds on the balance sheet.

By giving her some dividends however you could be seen to be income shifting - something which HMRC are going after big time. Unless she earns revenue for the company then she needs to give up the share. Driving you to the station won't be seen as revenue generation. Also being the company Sec doesn't cut it as dividend worthy either.

You could make her an employee and pay her 40p/mile for all business mileage that she does. E.g. driving you to the station. However if she combines this with her own commute then you need to check the HMRC guidance on if you can claim this. Depends how many extra miles she does if it is a significant detour.

Unless its completely in the opposite direction I would say that you can't do that.

Also if she is a higher rate tax payer I am sure that dividends are worse than just taking plain PAYE due to 20% (CT) and 22.5% (income tax). I've not done the sums but I wouldn't say it would be much different.

[lnoton]

Thanks so far.

I have done nothing with the Shareholders funds...I formed last December, does it matter that much?

Okay, so which form do i need to fill in for Rachel to sign over the share to me?

And how do i let Companies House know?

[Sockpuppet]

Thanks so far.

I have done nothing with the Shareholders funds...I formed last December, does it matter that much?

Okay, so which form do i need to fill in for Rachel to sign over the share to me?

And how do i let Companies House know?

When I did my first year end accounts the accountant just took the £1 off the divi I payed myself.

I don't think you need to let companies house know. You'll do that at YE through your annual return.

Not sure of the forms. I think you can just buy the share off her for £1. Easier to give it back to the company though and get them to pay £1 for it. Or nothing as she never paid for it in the first place.

[Gonzo]

You need to be careful. The shares were worth £1 when the company was created, but if your company has been trading and making money I don't think that those shares would still be valued at £1.

You need more expert advice than you are going to on here Do you have an accountant?

It would be less complicated if the the two of you were married then you could transfer the shares between yourselves without any tax implications. Perhaps you should marry Rachel and then get her to transfer her share to you.

[Sockpuppet]

Perhaps the compnay could un-issue the share as hey have not been paid for...has any sale taken place.

[lnoton]

You need to be careful. The shares were worth £1 when the company was created, but if your company has been trading and making money I don't think that those shares would still be valued at £1.

You need more expert advice than you are going to on here Do you have an accountant?

It would be less complicated if the the two of you were married then you could transfer the shares between yourselves without any tax implications. Perhaps you should marry Rachel and then get her to transfer her share to you.

Been trading for about a month, so there aint that much money in the pot.

Surely she could:
a) transfer the share back to the company.
or
b) we could declare dividends, so by emptying the company account other than VAT and CT monies, and then give me the share.


I have fired off an email to my accountant so I'll probably here back on Monday. I'll post the result to let you know.

Im also asking them about selling my personal laptop that I use for work all the time to the company.

To be honest i dont mind her having a share, nor paying divis to her, there is no tax advantage for us as she works full time in the higher tax bracket. I just wish doing a dividend waiver didn't set alarm bells down at HMRC.

Thing is she'll end up contracting through my company in the next 6 months or so and then we'll have to transfer the share back.

[Sockpuppet]

Don't give her dividends. I know there is no tax advantage to doing it but HMRC will still likley fine you.

Also get her to contract through her own Ltd. You're not married and even if you were it would be a bad idea.

Business and personal lives should be kept seperate.

If she had one share she has 50% of the company. So if you earn different amounts and wind the company up you both get half of whats left.

Also don't think "we'll never break up it won't happen to us". If you're that sure of it propose to her as soon as you read this. It can, will and has happened to lots of people before you.

She is only your GF nothing more, giving her half of the company is a seriously bad idea. Mixing business and personal lives is also another serious bad idea.


Sockpuppet (a.k.a CUK Love Grinch) - its near Feb 14th. Grumpy this time of year, lots of work to do.