2 Limited companies

[stealer]

Dividends need to be paid in accordance with things would get messy if you had 70% of the earnings but held 50% of the shares. How would you deal with that eventuality?

As far as IR35 is concerned, this process is largely irrelevant. As has been posted many times before IR35 is concerned with the working relationship behind a particular contract.

Have you considered the implications on VFRS? Two incomes could take you over £150K quite easily and then you'd have to come out of the flat rate scheme.

What happens to the assets of the company if (heaven forfend!) you and the GF split up?

In summary, its OK to do but I wouldn't receommend it.

Dividends aren't really an issue, all dividends we take just go into a joint savings account anyway, I was simply looking for the most cost effective way of paying them. We would be over the limit for FRS but don't really see that as a huge issue.

I guess, further down the line, if anyone in this situation were likely to split, you'd deal with it the same way any partnership does, be that professional or personal. There's always joint possessions, property, houses etc in a relationship.

[Alan @ BroomeAffinity]

Dividends need to be paid in accordance with things would get messy if you had 70% of the earnings but held 50% of the shares. How would you deal with that eventuality?

As far as IR35 is concerned, this process is largely irrelevant. As has been posted many times before IR35 is concerned with the working relationship behind a particular contract.

Have you considered the implications on VFRS? Two incomes could take you over £150K quite easily and then you'd have to come out of the flat rate scheme.

What happens to the assets of the company if (heaven forfend!) you and the GF split up?

In summary, its OK to do but I wouldn't receommend it.

[stealer]

This is kind of what I thought, in terms of IR35, it would look like "my" company has 2 clients. Which surely is better? GF is paid a salary as a normal employee but also gets dividends when they're paid out. Or would this slap her right inside IR35?

Or, is it better to not allow GF to be a shareholder? She'll be inside of IR35 anyway by being an employee, so If I take all the dividend money it might make more sense. Goes into a joint bank account anyway.

[stealer]

Surely from an IR35 point of view, its better to have one company, two directors and two interchangable 'resources' rather than two separate limited co's or one limited co with you as a shareholder and your 'partner' just invoicing \ working through the same limited co?

This is kind of what I thought, in terms of IR35, it would look like "my" company has 2 clients. Which surely is better? GF is paid a salary as a normal employee but also gets dividends when they're paid out. Or would this slap her right inside IR35?

[thunderlizard]

Is there a reason this can't be done? Looking for 1 set of accounts, 1 payroll, 1 insurance etc if it's allowable. Would she need to be a director of my account or can she be the secretary and still fulfill her commitments with her own clients?

Yes, believe it or not, it is possible for somebody to work for a company and not be a director of it But she might want to be one, in order to have more of a say in what happens.
If she's going to be a shareholder, your company can just issue her with the requisite number of shares, assuming it's still got enough unissued shares. Most small sole-shareholder contractor companies get formed with 1000 shares but only issue a couple to the shareholder (obviously, check this is true of yours). So if you're after a 60/40 split, and you've already got 2 shares, your company can issue 4 to her and another 4 to you.

[BolshieBastard]

Surely from an IR35 point of view, its better to have one company, two directors and two interchangable 'resources' rather than two separate limited co's or one limited co with you as a shareholder and your 'partner' just invoicing \ working through the same limited co?

[ratewhore]

What if she runs off with your best mate / you get her sister pregnant...

Pessimist. Can't you see they're in love...

[stealer]

If she's going to get dividends she'll need to be a shareholder, and if youco is already trading there may be issues with that. Might be better to start a new company between you if this is definitely what you want to do.

Nothing wrong in principle, but what if one starts earning a lot more than the other, will you be happy with a 50/50 split? What if she runs off with your best mate / you get her sister pregnant, are you still going to be happy to be in business together?

Is it not possible to have a meeting and release more shares? I don't mind making her buy them :-D

[VectraMan]

If she's going to get dividends she'll need to be a shareholder, and if youco is already trading there may be issues with that. Might be better to start a new company between you if this is definitely what you want to do.

Nothing wrong in principle, but what if one starts earning a lot more than the other, will you be happy with a 50/50 split? What if she runs off with your best mate / you get her sister pregnant, are you still going to be happy to be in business together?

[Manic]

Perfectly ok, myself and a friend do it, we split everything 50-50.

[stealer]

You must be loaded
Do you have monkey butlers?

Ha ha, no, but what a cool idea

...does anyone have a view?

[Sausage Surprise]

You must be loaded
Do you have monkey butlers?

[stealer]

Not sure if this should be in the accounting section or not but I have a quick question. GF and I are both contractors, both seperate ltd companies registered at the same address. Both have accountants, payroll, bank accounts etc. Would it be beneficial to close her company down and she invoices from my company?

Is there a reason this can't be done? Looking for 1 set of accounts, 1 payroll, 1 insurance etc if it's allowable. Would she need to be a director of my account or can she be the secretary and still fulfill her commitments with her own clients?

No problem splitting she dividends, and I assume this wouldn't be classed as income splitting as she's earning almost the same rate as me anyway.

Any thoughts?