Divorce

[brasi12345]

Have any other contractors on here ever gone through a divorce, where there ex wives are company employees/directors/shareholders?

I currently am, and was after anybody elses experience?
I fired as employee and removed her as director, but not as shareholder
Now she is complaining about not being told and not receiving salary/dividend since it started.

Any advice greatly welcome
Should I close the current company and start a new one?

Thanks in advance

[SallyPlanIT]

Have any other contractors on here ever gone through a divorce, where there ex wives are company employees/directors/shareholders?

I currently am, and was after anybody elses experience?
I fired as employee and removed her as director, but not as shareholder
Now she is complaining about not being told and not receiving salary/dividend since it started.

Any advice greatly welcome
Should I close the current company and start a new one?

Thanks in advance

I,m sorry that you are in the situation that you are. Please seek legal advice before taking any further action as it may be harmful in a divorce case.

[northernladuk]

I,m sorry that you are in the situation that you are. Please seek legal advice before taking any further action as it may be harmful in a divorce case.

Also get an accountant involved as well. If you have been using her tax breaks when splitting dividends but not actually paying her should could kick up a right fuss and land you neck deep in it with regard to your accounts if she decideds to take it to the HMRC.

[Svalbaard]

Agree with Sally. Get a business lawyer involved ASAP.

Hope it all works out for you.

[Wanderer]

Should I close the current company and start a new one?

Sorry to hear about your situation.

Closing the old company down is going to take a bit of time, but there is no reason why you can't cease trading using the old company and form a new one. If the company has retained profits or assets then it might get more complicated.

Another thought is that if your company is made up of 100 shares and you and your wife have one share each, then as director you might be able to issue the other 98 shares to yourself. That way the shareholders would get dividends according to the number of shares they hold - 1% for your ex and 99% for you.

Also remember that a shareholder is only entitled to dividends if the company makes a profit AND declares a dividend. If the director decided to take all the money as salary or a director's loan then the other shareholders would get nothing. The director would pay a lot more tax on salary than a dividend though... Shareholders may have other rights, I really don't know.

As others say - you need professional advice, don't rely on the nonsense that we come up with here!

[SallyPlanIT]

Sorry to hear about your situation.

Closing the old company down is going to take a bit of time, but there is no reason why you can't cease trading using the old company and form a new one. If the company has retained profits or assets then it might get more complicated.

Another thought is that if your company is made up of 100 shares and you and your wife have one share each, then as director you might be able to issue the other 98 shares to yourself. That way the shareholders would get dividends according to the number of shares they hold - 1% for your ex and 99% for you.

Also remember that a shareholder is only entitled to dividends if the company makes a profit AND declares a dividend. If the director decided to take all the money as salary or a director's loan then the other shareholders would get nothing. The director would pay a lot more tax on salary than a dividend though... Shareholders may have other rights, I really don't know.

As others say - you need professional advice, don't rely on the nonsense that we come up with here!

Whatever clever share structure you come up with (or even a new company) will be irrelevant if the divorce goes as far as a court making a decision. They will include all income and assets from every source. You sign a legal document (schedule E form) which declares all income and outgoings.

[lje]

Also, how did you remove her as a director? If it was without her knowledge then you have broken the law.

Removal of a director must be conducted in accordance with the Companies Act 1985 s303.

By the Companies Act 1985 s303 a company may remove a director by ordinary resolution (a simple majority of the shareholders) before the expiration of this period of office, notwithstanding any provision to the contrary in the Articles of the company and notwithstanding any term of his contract.

The removal of a director must be following special notice (28 days), having been given to the company of the proposed resolution.

Once the Special Notice period (28 days) has expired, the company must then send a copy of the resolution to the director concerned. The director has the right to address the shareholders and other directors at the General Meeting, which has been arranged to discuss the proposal to remove them from office. The director may also address the shareholders in writing.

Once the removal process has been completed, a copy of the resolution and 288b form (termination of director from office) should be sent to Companies House.

Irrespective of whether or not you have money in your current company you should set up a new one ASAP. The money in the current one will need to be dealt with in the fulness of time. You will of course be assessed on your total income (as you should be - she may perfectly reasonably be entitled to some maintenance) but at least the money is coming in cleanly. You can set a up a company now-a-days with only one director so you don't need to worry about that.