Permissions required for revoking Ltd Co. shares

[mouseorgan]

If they were allocated after incorp then it's a simple form submission to Companies House, and if your accountant did it online then you may not have signed anything.

If your wife owns 50 shares out of a hundred then she owns half the company, and could request payment for her shares. If you don't have control, being over 50%, then there's not much you do without her approval.

Are you still contracting? If so, set up a new company with you owning 100%. At least then you're not adding anything to the company that your wife owns half of. I presume it will still get taken into account in the divorce, but at least there's no issues over shareholdings.

Why would my accountant have not requested anything then? I didn't even realise they had prepared the paperwork. I only asked a few questions about doing it, then found an email saying it was all done and finalised. Quite what this means though, I don't know as when I said "Why have you already done this??" they said it could be cancelled easily enough.

I am contracting still, yes. There's not much in the accounts save for CT savings thanks to how much I'm paying her.


EDIT: After reviewing the communications with my accountant I now have a better understanding of how the application of shares work and how they are officially tracked. My confusion was that the J30 is not required to be sent to Companies House in order to enact a change in the stock holdings. As such I did not think it possible to finalise the change in stock without me having first returned the transfer forms to CH. I was wrong in this presumption, and don't wish it to reflect on my Accountant in any way.

[mouseorgan]

As someone who is unmarried but in a long term stable relationship meaning I cannot take advantage of something like this I would say nuts to appropriate. If it is allowed then hold them to ever letter of the rule.

If it is a personal issue then I appreciate that is a different matter.

I could certainly argue that it's appropriate as she's not working at all, and me and Child Benefit are supporting her exclusively. But it's all far too messy and complicated. Need it simpler for personal reasons.

[Clare@InTouch]

Why would my accountant have not requested anything then? I didn't even realise they had prepared the paperwork. I only asked a few questions about doing it, then found an email saying it was all done and finalised. Quite what this means though, I don't know as when I said "Why have you already done this??" they said it could be cancelled easily enough.

I am contracting still, yes. There's not much in the accounts save for CT savings thanks to how much I'm paying her.

You need to question what your accountant has actually done, as he should not be doing anything without your express permission. He certainly cannot transfer shares from your wife to you without either of you being aware of it! He may mean that he's filed something at Companies House, but I would question what.

I'd still suggest setting up a new company with you as sole director and shareholder, at least then your main contracting company will be yours. You can then run down the other company to zero, legally of course, in which case none of the shares will be worth anything.

[Wanderer]

I'd still suggest setting up a new company with you as sole director and shareholder, at least then your main contracting company will be yours. You can then run down the other company to zero, legally of course, in which case none of the shares will be worth anything.

Presuming there isn't a lot of goodwill invested in the existing company (branding/reputation etc) then I'd do what Clare says and make a clean break of it with a new company then close the old one as and when it is possible.

If the spouse is still a 50% shareholder of the company then they are still entitled to dividends when/if they are declared and being a 50% shareholder you wouldn't necessarily have enough voting rights to control the company either.

[mouseorgan]

You need to question what your accountant has actually done, as he should not be doing anything without your express permission. He certainly cannot transfer shares from your wife to you without either of you being aware of it! He may mean that he's filed something at Companies House, but I would question what.

I'd still suggest setting up a new company with you as sole director and shareholder, at least then your main contracting company will be yours. You can then run down the other company to zero, legally of course, in which case none of the shares will be worth anything.

Thanks Clare, really appreciate your responses.

Hmm, maybe I'm seeing the issues of having a large accountant who processes forms rather than applies logic...

Can you possibly point me towards anything about running down the accounts? TBH I'm not really sure what that would constitute (save for the obvious end balance).

[Dominic Connor]

I'm not a lawyer, but...

It seems to me that there are too many moving parts in this process.

Given that this is part of an agreed split then I'd be tempted to buy the shares since if you have a transfer of ownership without consideration (ie getting something in return) then problems can leak in.

[Clare@InTouch]

Thanks Clare, really appreciate your responses.

Hmm, maybe I'm seeing the issues of having a large accountant who processes forms rather than applies logic...

Can you possibly point me towards anything about running down the accounts? TBH I'm not really sure what that would constitute (save for the obvious end balance).

Just open a new company, get a bank account set up and get it registered for VAT and PAYE. Tell your agency about the new company and start billing from it.

Your old company will need to issue you a P45. Use that P45 to set up wages on your new company. De-register for VAT on your old company. Call HMRC to close the PAYE scheme, or file the closure via RTI.

You're then left with a new company that you're invoicing through, that is VAT registered and pays you wages. You have an old company that has no income, is not VAT registered and has no PAYE. What you do with the old company then depends on how much money it has left after CT.

[mouseorgan]

Just open a new company, get a bank account set up and get it registered for VAT and PAYE. Tell your agency about the new company and start billing from it.

Your old company will need to issue you a P45. Use that P45 to set up wages on your new company. De-register for VAT on your old company. Call HMRC to close the PAYE scheme, or file the closure via RTI.

You're then left with a new company that you're invoicing through, that is VAT registered and pays you wages. You have an old company that has no income, is not VAT registered and has no PAYE. What you do with the old company then depends on how much money it has left after CT.

OK, but then that just leaves me with an account with something like £20k in it. What would happen to that?

If my wife were to demand the cash from 50% of the dividends for the last year, where would I stand on settling that outside of the company? That sounds like it could be horrible if she wants to hurt me. I guess I could actually not declare a portion of the dividends and instead increase my salary retrospectively so that her dividend income is approximately what I've been given her all along? I certainly hope it won't come to anything like that but who knows? Maybe this is getting too far from the original question.

[TheFaQQer]

Isn't S660A an irrelevance here?

While you are married, then there is nothing that HMRC can do to stop you splitting the share income between husband and wife (see Arctic).

When you are not married, and have divorced, why would HMRC think that you are doing the splitting as an artificial way of avoiding tax, and then taxing you accordingly as if all the income was yours? You're not in a relationship any more, so can hardly be getting some benefit from the arrangement - on the contrary, in fact.

If your wife owns half the company, then as others have said, you either need to buy those shares from her, or shutdown (with her approval) and start again. Whether it's legal or not, I don't know, but you could consider starting a new company, and invoicing the old one as a way of getting the money out without your wife being involved. Obviously you'd have to hand over 20% in VAT, but that may be preferable to 50% to the wife if this isn't an amicable split.

[Clare@InTouch]

OK, but then that just leaves me with an account with something like £20k in it. What would happen to that?

If my wife were to demand the cash from 50% of the dividends for the last year, where would I stand on settling that outside of the company? That sounds like it could be horrible if she wants to hurt me. I guess I could actually not declare a portion of the dividends and instead increase my salary retrospectively so that her dividend income is approximately what I've been given her all along? I certainly hope it won't come to anything like that but who knows? Maybe this is getting too far from the original question.

If you start backdating salary and re-naming dividends then you're potentially heading for worse trouble, especially if your wife's solicitor discovers you're changing things to prevent her getting her "fair share". You should have dividend vouchers which backup all the payments you made anyway, and salary is submitted monthly via RTI these days.

The £20k can sit there until you decide what to do. You could pay it to yourself as salary, pay it as a dividend to all shareholders, or leave it there until after the divorce when you may have more clarity over what you can do with it.