New Limited company question

[K12AN]

Hello all

My mother is investing and supporting me starting a new limited company for my contracting. She is going to provide funding/financial support for the new limited company and will be 50% shareholder – I will be the only Director/Employee. She would be issued normal shares with voting rights etc. She will pay for all company startup/on-going costs etc until the company is self-sufficient. She will not be an employee or Director – this is purely an investment for her and a way to support me in my new enterprise.
I will be the only Director/employee of the limited company and will be the paid via PAYE.
The company will issue dividends to shareholders if there are funds available after costs, salary’s, expenses etc.

Does this sound acceptable? Sounds OK to me, but one of the accountants I went to see seemed to think that this may look suspicious to the HMRC.

[tarbera]

lol

Hello all

My mother is investing and supporting me starting a new limited company for my contracting. She is going to provide funding/financial support for the new limited company and will be 50% shareholder – I will be the only Director/Employee. She would be issued normal shares with voting rights etc. She will pay for all company startup/on-going costs etc until the company is self-sufficient. She will not be an employee or Director – this is purely an investment for her and a way to support me in my new enterprise.
I will be the only Director/employee of the limited company and will be the paid via PAYE.
The company will issue dividends to shareholders if there are funds available after costs, salary’s, expenses etc.

Does this sound acceptable? Sounds OK to me, but one of the accountants I went to see seemed to think that this may look suspicious to the HMRC.

thanks man !!! I now have coffee on my keyboard laughing !!!!!

[DirtyDog]

Hello all

My mother is investing and supporting me starting a new limited company for my contracting. She is going to provide funding/financial support for the new limited company and will be 50% shareholder – I will be the only Director/Employee. She would be issued normal shares with voting rights etc. She will pay for all company startup/on-going costs etc until the company is self-sufficient. She will not be an employee or Director – this is purely an investment for her and a way to support me in my new enterprise.
I will be the only Director/employee of the limited company and will be the paid via PAYE.
The company will issue dividends to shareholders if there are funds available after costs, salary’s, expenses etc.

Does this sound acceptable? Sounds OK to me, but one of the accountants I went to see seemed to think that this may look suspicious to the HMRC.

What startup and on-going costs are you envisaging, before the company is self-sufficient?

Laptop, travel and accommodation, accountancy fees are the only ones that I can really think of at the start. So, maybe a £5k outlay before the first invoice gets paid (maximum you want to be looking at would be 30 days at the start, but let's say 60 days from the start). And in return for this 60 day loan of £5k, you will give up 50% of the company. 50% of the dividends that the company will pay out over the course of it's life.

Do you think HMRC might just look at this arrangement and think that it's a way for you to extract money out of the company using your mother's tax allowance rather than just paying it directly to you?

If she really, really wants to help, then get her to loan the company money interest free for a few months. Or loan it to you personally and then you use that to loan the money to the company.

(Not to be too morbid, but one suspects that you have a longer life expectancy than your mother. So, in the event of her dying, who would inherit half of your business??)

[stek]

What startup and on-going costs are you envisaging, before the company is self-sufficient?

Laptop, travel and accommodation, accountancy fees are the only ones that I can really think of at the start. So, maybe a £5k outlay before the first invoice gets paid (maximum you want to be looking at would be 30 days at the start, but let's say 60 days from the start). And in return for this 60 day loan of £5k, you will give up 50% of the company. 50% of the dividends that the company will pay out over the course of it's life.

Do you think HMRC might just look at this arrangement and think that it's a way for you to extract money out of the company using your mother's tax allowance rather than just paying it directly to you?

If she really, really wants to help, then get her to loan the company money interest free for a few months. Or loan it to you personally and then you use that to loan the money to the company.

(Not to be too morbid, but one suspects that you have a longer life expectancy than your mother. So, in the event of her dying, who would inherit half of your business??)

Check the guy's posting history, it's all EBT woes.....

[TheCyclingProgrammer]

Duplicate thread:
http://forums.contractoruk.com/accou...-question.html

[cojak]

I'll lock this one.