Need to be Majority Shareholder in order to sign contract

[ichidan]

I've just got a new contract which starts in just over a week's time. I'm looking forward to the change, including the extra money that this one affords. But with more money, comes more legal spiel...

So I was busy filling in countless forms the other day, and came across one regarding percentage shares in the company, and whether I was the majority shareholder in my limited company. Turns out there are 3 people in my company (me, and 2 of my brothers), all software developers. So we each have 1 share each. Now this is a problem (it wasn't a problem before with the other contracts I did - used to just sign 2 or 3 forms and done).

In any case. My brothers are not contracting at the moment, and are unlikely to do so via our company for the foreseeable future. They're happy for me to do whatever I want with the company, including increasing my shares, removing their shares or taking their names off the directorship if need be. Whatever it takes to increase my majority to above 50%.

The problem I have is; how do I do this? Can I do this online, do I need to mail out a form? How long will it take? I'd really like to sign the remaining forms with the agency soon, as I don't want to lose the contract over some technicality.

[jamesbrown]

Are you signed up for web filing at CH online? Otherwise, I'd sign-up and file a termination form online:

Top FAQs - How do I change my company's directors or secretary?

[malvolio]

Have a minuted board meeting where all directors agree to the reallocation of shares and sign up to it. Job done. The paperwork with Companies House will also need to be done, but it's the Board that makes the legal decision. I assume the other two are happy to give up their dividend income of course...

The question, however, is a clumsy attempt by the agency to cover their back for IR35 and has no legal standing: any officer of the company can sign contracts on its behalf, including the CoSec if you have one. Whether it's worth arguing the point or not is a moot point.

[TheFaQQer]

Tell the agency that there is no majority shareholder, and that it's a ridiculous requirement.

Explain that you are a director and will sign the forms in that role.

[Jessica@WhiteFieldTax]

Worth noting that whilst changes to officers (director and secretary) can be field online contemporaneously, as can share issues - there is no contemporaneous filing facility for share transfers - its updated annually via the annual return.

[malvolio]

Worth noting that whilst changes to officers (director and secretary) can be field online contemporaneously, as can share issues - there is no contemporaneous filing facility for share transfers - its updated annually via the annual return.

Quite right, I forgot that minor detail...

[northernladuk]

In any case. My brothers are not contracting at the moment, and are unlikely to do so via our company for the foreseeable future. They're happy for me to do whatever I want with the company, including increasing my shares, removing their shares or taking their names off the directorship if need be. Whatever it takes to increase my majority to above 50%.

Surely this is a problem for the OP as well. If he continues with this setup he is either going to have to start regular dividend waivers or be clearly income splitting with a non spouse so is spot of bother and must sort this out, regardless if his brothers are happy or not?

[Nixon Williams]

One note of caution, whilst it is quite simple to actually transfer shares, there can be tax implications of doing so.

Much of this will depend on the asset position of the company etc and I would advise you to consult your accountant so they can advise you on your particular situation.

If our brothers no longer wish to be involved with the company and contracting it may be an idea to wind up this company and start a brand new one with you as the sole director/shareholder.