Registering a limited company

[sider]

Almost ready to register my first ltd company.

Any company formation recommendations or things to be aware of?

Also when registering my wife and I as Directors, is there a typical split to follow - ie 50/50 or 60/40 in terms of share capital?

[Eric Mc]

sider said:

Also when registering my wife and I as Directors, is there a typical split to follow - i.e. 50/50 or 60/40 in terms of share capital?

Don't get confused. The shareholding split you decide on is NOTHING to do with your position as "Directors" of the company.

The shareholding relates to the "Shareholders" of the company (which is pretty obvious when you think about it).

The shareholders are the actual owners of the company.

Directors run and manage the company on behalf of the shareholders.

They do not have to be the same people.

Why do you plan to make your wife a "Director" of the company?

Why do you plan to make your wife a "shareholder" of the company?

Does she have any day to day involvement in the running and management of the company?

Is she prepared to take on the legal responsibilities of a company director?

Does she know what these are?

If you make her an equal; shareholder of the company, she will be an equal owner of the company i.e. it will not be "your" company. In theory, she could block you from doing things with the company as she has an equal vote regarding company decisions.

She would also be entitled to 50%b of the company's assets on dissolution.

Have you considered making her a minority shareholder?

[sider]

Thanks Eric.

Wife will be doing a day or so per weeks worth of paperwork, filing, book keeping etc.

Intention was to make her a director to allow a dividend.

In terms of shareholding, hadn't thought of that - will perhaps just leave it as 100% mine - no need to confuse matters I suppose! Thanks.

[sider]

Good point re legal responsibilities of being a director too - will check these out now!

[sider]

Question thus arises - does a company formally need a company secretary??

[sumo69]

sider said:

Question thus arises - does a company formally need a company secretary??

Not anymore - you can appoint one (who can be 1 of the directors if you want) or not bother.

Have you discussed these issues with your accountant?

David

[sider]

sumo69 said:

Not anymore - you can appoint one (who can be 1 of the directors if you want) or not bother.

Have you discussed these issues with your accountant?

David

Hi David,

Yes. Sort of.

I'm away on hols at the moment so just mulling over ideas whilst the kids are in bed.

Got a meeting booked with accountant on my return to iron out these issues.

Thanks

[sider]

Am I right to assume that a formal secretary would be very important with a level of staff?

Whereas what I'm doing is consultancy work with me doing all the fee earning stuff and my wife invoicing clients etc.

[williamp]

Companies house website has a link to formation agents, which charge anything from £20 upwards to form the business.

Dont forget a limited company must have a recognisable business account. A personal account will not suffice

[anonymous-user]

Yes, you should chat with the accountant to get things clear in your mind and to set up the company in the optimum way for your circumstances and business needs

A Director is not entitled to a dividend. Dividends are paid to shareholders.

[sider]

JPJPJP said:

Yes, you should chat with the accountant to get things clear in your mind and to set up the company in the optimum way for your circumstances and business needs

A Director is not entitled to a dividend. Dividends are paid to shareholders.

Thanks for that last point - probably quite an important one I guess!

[Eric Mc]

sider said:

Thanks Eric.



Intention was to make her a director to allow a dividend.
.

A person does not need to be a director to be entitled to a dividend. They only need to be a shareholder.

HOWEVER, after the Arctic Systems case (Google the case as it is required reading I think for all husband/wife companies) it is perhaps prudent that a spouse be also given a position within a company in addition to being a shareholder.