shares allocation, have I screwed up?

[Bluebird]

Thanks everyone for the advice so far.

Would it be in my best interests to change the shareholding so that I was the primary share holder (i.e. 100% of the shares)? If so how can I go about doing this?

I'm concerned that from the comments above should I pay a dividend out the company to 50/50 between myself and my partner, the tax man may well look at the situation.

I have a legitimate reason for doing this, we have a 1 year old son and for this reason my partner works from home, so 16 hours a week, whilst I work fulltime, but it's a family effort and so the benefit of the companies success is down to both of us working as a team here, the hours should be irrelevant?

Check out companies house - there is a specific form for changing share allocation - needs to be signed by all directors & secretary

[chris79]

Thanks everyone for the advice so far.

Would it be in my best interests to change the shareholding so that I was the primary share holder (i.e. 100% of the shares)? If so how can I go about doing this?

I'm concerned that from the comments above should I pay a dividend out the company to 50/50 between myself and my partner, the tax man may well look at the situation.

I have a legitimate reason for doing this, we have a 1 year old son and for this reason my partner works from home, so 16 hours a week, whilst I work fulltime, but it's a family effort and so the benefit of the companies success is down to both of us working as a team here, the hours should be irrelevant?

[THEPUMA]

I don't particularly see a problem with the way you have set up. The split of salaries would not concern me.

You do have to pay the £1,000 into the company (or declare it as a dividend but not pay it to yourself - same difference). Most people usually avoid a high shareholding for this reason but it probably helps your position with regard to the Settlements Legislation.

This is potentially an issue as you cannot rely on the spousal exemption with regard to the Settlements Legislation but as things stand the taxpayer is currently "winning" the Arctic case. We will know more come June when it goes to the House of Lords.

In the meantime you may wish to consider restricting your dividend to £1,298 (assuming you have no other income) each so that even if HMRC win there will be no liability arising. Obviously, this is subject to the company making sufficient profits and you being able to live off this amount.

HTH

Puma

[Lewis]

£100 regardless of how many shares you issue

Isn't it based on number of shares issued and price of shares? I started with 10 x £1 shares so opened account with £10.

With regards to 1/1 50/50 500/500. I think there is a limit on the number of shares (mine is 1000 or 100 or something) and so having small numbers gives more flexibility for the future (plus makes adding up easier )

[Vito]

Can't see an issue with how many shares you have issued (I may be wrong here and it is too early for me to be arsed to look it up, but I think your initial company valuation will default start at £100 regardless of how many shares you issue and no you don't need to invest any money, although I might be talking tripe here)...but your salary structure is somewhat interesting.

Your other half is taking almost as much as you out of the business although she is only doing 16 hours per week...add to that the fact that you are giving dividends on a weekly basis and I think you are only one step short of inviting Gordo round for afternoon tea!


Re-think re-think re-thing...and do it now!

[thunderlizard]

I could barely work out what the question was there, but what you say is correct.

Can't see a difference between a 50/50 split of shares however you do it, whether 500/500 or 1/1.

Weekly dividends though..? Gadzooks.

[chris79]

When I formed my company (being new to all this), I set myself the following share allocation:-

Myself (500 shares) - Director
My girlfriend (500 shares) - Company secretary

Now, both myself and my girlfriend contract, although she only does 16 hours per week..

Am I right in in thinking that I pay myself a 'directors fee' (£100) per week, my girlfriend minimum wage, and that the rest would be a dividend, but split 50/50 between us (it all ends up back in our joint account anyway)..

But on this basis my share vouchers would read (if say I was to announce £1000 of dividend payment in a particular week):-

£1 per share... thus giving £1000 over the 1000 shares allocated?

In hindsight I should have allocated us both 1 share each. Also does this mean technically I should be investing £1000 into the company because I valued my shares at £1 each when I formed (I think! :S)..