Reply to: Form 42 Query - Unmarried partner becomes a director

[SueEllen]

It is an interesting point this. I remember having a very heated argument with friends in Vegas about this one night. The term we were discussing ended up as 'Planning for failure'. A couple of guys were absolutely adamant that you shouldn't do it and got very upset about it. Their idea was if you plan for it it will happen or you should be questioning the whole relationship. They got quite upset about it and wouldn't entertain the idea whatsoever. A couple of guys think it is a good idea but even mentioning it to the wives would have them in front of a divorce court before they finished the conversation and then a couple of us that were quite happy to do it as it incurred no extra costs etc..

Oddly enough using the same order we had guys with childhood sweethearts never been in other long term relationships, one or two with much younger wives and us that were on our second or third long term relationships so you can see why they argued that. Anyway, no one would change their opinion.

The other pointed ignored is serious illness and death.

If you aren't married then you have automatically have absolutely no legal rights to the other person's property let a lone rights to sort out issues around those incidents. This is why gay people fought for civil partnerships.

If Iain is serious about setting up a business with his girlfriend then he should marry her as if she screws him or vice versa then least the courts can take some action. Yesterdays ruling on the oil tycoon, Michael Priest, divorce indicates this.

[Clare@InTouch]

It is an interesting point this. I remember having a very heated argument with friends in Vegas about this one night. The term we were discussing ended up as 'Planning for failure'. A couple of guys were absolutely adamant that you shouldn't do it and got very upset about it. Their idea was if you plan for it it will happen or you should be questioning the whole relationship. They got quite upset about it and wouldn't entertain the idea whatsoever. A couple of guys think it is a good idea but even mentioning it to the wives would have them in front of a divorce court before they finished the conversation and then a couple of us that were quite happy to do it as it incurred no extra costs etc..

Oddly enough using the same order we had guys with childhood sweethearts never been in other long term relationships, one or two with much younger wives and us that were on our second or third long term relationships so you can see why they argued that. Anyway, no one would change their opinion.

What was hilarious however, the two guys in one and only long term relationships both admitted to squirrelling money away from their wives just in case. Ridiculous really.

I don't see it as planning for failure, I just see it as being careful. I don't plan to crash my car but I still have insurance. I also have a Will just in case I get hit by a bus, even though I'm not planning on dying anytime before I reach a senile aged 105.

It's lovely to imagine that you'll never split up and you'll be madly in love forever, but if your other half does leave you to run away and join the circus you wouldn't want the additional stress of then having to sort out the company finances on top of everything else. Why complicate things when there's absolutely nothing to gain?

[TheFaQQer]

To be fair Clare and all we are forgetting that they will never split up.

According to the OPs first ever post, a year ago, she was the fiancee and he was going to become a director of her company. According to the OPs post in this thread, a year ago she was the girlfriend, joining his company.

So yes, their circumstances can certainly change

[northernladuk]

To be fair Clare and all we are forgetting that they will never split up.

However Ian hasn't considered what would happen if one of them gets seriously ill or unfortunately dies. I think he can easy solve those and some of the other problems though by getting married.

It is an interesting point this. I remember having a very heated argument with friends in Vegas about this one night. The term we were discussing ended up as 'Planning for failure'. A couple of guys were absolutely adamant that you shouldn't do it and got very upset about it. Their idea was if you plan for it it will happen or you should be questioning the whole relationship. They got quite upset about it and wouldn't entertain the idea whatsoever. A couple of guys think it is a good idea but even mentioning it to the wives would have them in front of a divorce court before they finished the conversation and then a couple of us that were quite happy to do it as it incurred no extra costs etc..

Oddly enough using the same order we had guys with childhood sweethearts never been in other long term relationships, one or two with much younger wives and us that were on our second or third long term relationships so you can see why they argued that. Anyway, no one would change their opinion.

What was hilarious however, the two guys in one and only long term relationships both admitted to squirrelling money away from their wives just in case. Ridiculous really.

[Clare@InTouch]

Stop drooling, Clare.

Oops, sorry

It's the thought of the extra chocolate I could buy with the fee

[SueEllen]

To be fair Clare and all we are forgetting that they will never split up.

However Ian hasn't considered what would happen if one of them gets seriously ill or unfortunately dies. I think he can easy solve those and some of the other problems though by getting married.

[Old Greg]

Agreed. If you issue shares to someone they then own part of your company - what happens if you split up, there's £100k in the bank, and they refuse to sell their shares back to you? You couldn't pay a dividend without also giving money to them (unless you have alphabet shares, but as you're not married you're then getting into the whole S660a situation). You can't make certain company decisions without their approval such a striking off. The whole thing can become so messy, and I've seen it happen.

Plus, two companies means less danger of going over the flat rate VAT threshold. Two sets of FRS profit more than pays for the extra accountancy costs of running two companies.

Stop drooling, Clare.

[Clare@InTouch]

Keep your affairs separate IMO. We have at least one poster on here that is still trying to deal with one of the directors taking 18k out of the business and refusing to give it back... oh hang on.. you were already advised to do that...

Anyway, your accountant will clear your question up for you.

Agreed. If you issue shares to someone they then own part of your company - what happens if you split up, there's £100k in the bank, and they refuse to sell their shares back to you? You couldn't pay a dividend without also giving money to them (unless you have alphabet shares, but as you're not married you're then getting into the whole S660a situation). You can't make certain company decisions without their approval such a striking off. The whole thing can become so messy, and I've seen it happen.

Plus, two companies means less danger of going over the flat rate VAT threshold. Two sets of FRS profit more than pays for the extra accountancy costs of running two companies.

[SueEllen]

That's rather optimistic of you, SueEllen.

He won't post back under this username when it goes wrong.

He doesn't realise with marriage/civil partnership there are legal provisions to ensure one person doesn't run off with the money or if they unfortunately die the other person isn't screwed.

[Old Greg]

Another one who will learn the hard way.

That's rather optimistic of you, SueEllen.

[northernladuk]

Well lets see if I can make my question next year much more intelligent then


The HMRC regulations state....

A report is not normally required where shares are transferred by an individual in the
normal course of domestic, family or personal relationships of the person transferring the
shares

hence why I was asking if an unmarried domestic partnership would count given the regulations don't mention anything about marriage/civil partnership.


thanks all for your responses. i'll now run for cover.

Keep your affairs separate IMO. We have at least one poster on here that is still trying to deal with one of the directors taking 18k out of the business and refusing to give it back... oh hang on.. you were already advised to do that...

Anyway, your accountant will clear your question up for you.

[ian2012]

Well lets see if I can make my question next year much more intelligent then


The HMRC regulations state....

A report is not normally required where shares are transferred by an individual in the
normal course of domestic, family or personal relationships of the person transferring the
shares

hence why I was asking if an unmarried domestic partnership would count given the regulations don't mention anything about marriage/civil partnership.


thanks all for your responses. i'll now run for cover.

[SueEllen]

Another one who will learn the hard way.

[northernladuk]

So I took it you decided to ignore the advice you were giving by one of our resident accountants then? If so what is the point of giving you any more?

http://forums.contractoruk.com/accou...ml#post1578436

If you're contracting long term, and earning over £30k, I'd usually suggest you look to get your own company set up. It keeps things cleaner, and there's no concern over having shares split between an unmarried couple (with the possible income shifting issues that could bring if you split dividends to make better use of both tax bands).

Isn't all this a bit late if she joined you a year ago?

[Pondlife]

Good spot

Maybe he's busy chasing the aurora with Menelaus?

I look forward to reading the same post this time next year.