If I were you, I'd:
- read up on companies, directorships and taxation
- once you've a basic understanding, consult an accountant for professional advice
As you’re talking about directorships, I assume it’s a limited company?
If so, there are (at least) three issues to consider in the questions you're asking, which are in general quite separate, though they do impinge on each other:
- ownership
- directorship
- employment
From some of the comments you’ve made, I think you may be confusing these with each other.
Ownership is established by how many shares there are in a company and how many of those shares you own. Whoever owns the majority of shares ultimately controls the company. Shareholders appoint directors to run the company on their behalf. Directors may or may not be shareholders themselves.
The advantage of being a director is that you get to run the company: see what’s going on and input to the company’s direction. The disadvantage are the obligations that come with it: if you don’t watch what you’re doing, you can end up as criminally liable.
Employees of the company get paid for their efforts. Employees may or may not be shareholders and they may or may not be directors. Employees who are both directors and significant shareholders are treated differently by Revenue.
At the moment, you seem to be working for nothing in a company you don’t own in return for no salary. Is this correct?
To answer your questions:
1. Would it be best to put our names down as directors? Firstly, directors are appointed by shareholders and/or the existing directors: you can’t just “put your name down”. To answer this, see the note above on the advantages and disadvantages. Personally, if I were putting significant effort and/or cash into a company, I’d look to be a director to be able to see what’s happening to that investment, but the obligations are significant.
2. How will it affect us as far as tax assessment and legal responsibilities go? This is a complex question and you need professional advice: as noted above how revenue treats your income from the company depends on whether you are a shareholder and/or a director. The legal responsibilities come with being a director.
I’d say by far the most important issue to straighten out as soon as possible is ownership. If the company is currently owned by someone else and they gift you partial or complete ownership when the value of the company is arguably worth €1,000, it is completely different from having it gifted (or inherited) when it is valued at €1,000,000. Again, you need professional advice on this. If you’re the one putting all the effort in, I’d suggest that you should be the owner (either complete or partial) sooner rather than later (i.e. transfer as soon as possible).