Shareholder but not Director?

[monobrow]

Hi All,

Back to the darkside after 5 years or so as perm.

i'm married, wife doesn't work at all and my accountants suggest that the most efficient way to recieve income as a LTD would be for me to be the only director and my wife as shareholder and do a salary and 50/50 divi deal. Does this seem right? back in the old days, I thought you had to both be a director to recieve dividends?

im aware of the artic case, pretty well read, but im just not sure if im making an error here.

any thoughts appreciated

thanks

mono

[lje]

You can be a shareholder and not a director. No problem with that. Why not make her a director too though?

In the old days you had to have a company secretary as well as a director so the advice would have probably been to make your wife the company secretary. Now-a-days you only have to have one director, but you can have more.

[Clare@InTouch]

You have to be a shareholder to receive dividends. You don't need to be a director to receive dividends.

So to do what your accountant suggests you'd both have to shareholders holding 50% of the shares. If you're intending to pay your wife shares then I would suggest that you ensure those holdings are set out on incorporation - the Arctic case included the fact that the wife held subscriber shares (those issued on incorporation) and therefore they had no value at that time.

[monobrow]

Thanks for the feedback all, put my mind at ease.

mono