The silent partner
Discussion
Hi all,
I'm trying to set up a LTD company (Company A123 LTD, for the purposes of this example) with a business partner. However, there is a slight issue.
We have come up with an idea which we both agreed to owning 50/50. However, he doesn't want to be listed a stakeholder in the company. There's a slight conflict of interest in that; the idea is something he may have thought of whilst he was working. So he doesn't want his current employer to find out.
Should he also create a LTD company (Company B123) that becomes a subsidiary company of Company A123 LTD?
What is the best way of making him a key business partner without necessarily having him as a business partner (oxymoron?!) ?
Thanks
I'm trying to set up a LTD company (Company A123 LTD, for the purposes of this example) with a business partner. However, there is a slight issue.
We have come up with an idea which we both agreed to owning 50/50. However, he doesn't want to be listed a stakeholder in the company. There's a slight conflict of interest in that; the idea is something he may have thought of whilst he was working. So he doesn't want his current employer to find out.
Should he also create a LTD company (Company B123) that becomes a subsidiary company of Company A123 LTD?
What is the best way of making him a key business partner without necessarily having him as a business partner (oxymoron?!) ?
Thanks
That might have worked once but the law now requires that all Persons of Significant Control in a company MUST be disclosed at Companies House.
Have a read through the Company House guidance on the matter which is et out in the following link -
https://www.gov.uk/government/publications/confirm...
Have a read through the Company House guidance on the matter which is et out in the following link -
https://www.gov.uk/government/publications/confirm...
a) has he checked his contract for how IP is owned etc. in his current employment, if there is a possibility that in apfact his employer could claim ownership and they discover the connection, they could decide to pursue your business... run a mile?
b) what role does he need to play, does he need to have significant control, could someone else own he shares have that control instead of him? i.e. is he actually going to be running the business if he has current employment...
c) if he has current employment, what is he going to be doing for his 50% of the shares
d) never set up a business between 2 people 50:50, it is a nightmare if it goes wrong
b) what role does he need to play, does he need to have significant control, could someone else own he shares have that control instead of him? i.e. is he actually going to be running the business if he has current employment...
c) if he has current employment, what is he going to be doing for his 50% of the shares
d) never set up a business between 2 people 50:50, it is a nightmare if it goes wrong
M511 said:
We have come up with an idea which we both agreed to owning 50/50.
When you say you intend to own the idea 50/50, do you mean the physical 'idea' or the 'business' that will make/provide that idea?Is the idea something that relates to his current employment; in other words, is he currently being paid to develop ideas like the one you are looking at? Did he use company time and company money to develop that idea? If yes to these, then whichever way you skin the cat, you are likely to find yourself in tricky waters and he should look very carefully at his contract of employment.
The only way you can keep him truly off-grid on this is to keep him off grid and retain a tight written agreement that at some point in the future, 50% ownership (or 50% of the money) will go his way.
The correct way to go about it is for him to leave his employment and run out whatever restraint clause exists in his contract; then join with you.
Eric Mc said:
Being connected to someone who is a PSC makes you a PSC too. So setting a wife as the shareholder does not remove the requirement to declare the REAL PSC i.e. the husband.
The whole point of the PSC rules is to prevent people hiding their influence in a company.
Not sure I follow you Eric.The whole point of the PSC rules is to prevent people hiding their influence in a company.
In my example, would the husband or the wife automatically be a PSC?
ie at 25% Shareholding each.
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