Setting up LTD - 2 directors - share allocation equal or not?

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sadie

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Hi, I'm setting up an Ltd as I will be a Contractor for a new job.

Looked into umbrellas companies, but this way suits best.

A family member (spouse) will be the 2nd Director.

Do I need to make sure the 2nd director has less than 15% of the shares?
So that they are not a proprietary Director?

Or does it matter?
 
You can divide up the shareholding any way you like. There can be tax advantages down the line and certain reliefs and exemptions available to shareholders which might be helpful in certain circumstances. Helpful in that instead of having only one threshold to play around with, you might have two.
 
Gordon Gekko said:
You can divide up the shareholding any way you like. There can be tax advantages down the line and certain reliefs and exemptions available to shareholders which might be helpful in certain circumstances. Helpful in that instead of having only one threshold to play around with, you might have two.
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Doubt that will even come into play. They are a contractor, so unlikely to create any value for the company, it'll just feed the salary through it, less pension contributions and mobile phone costs. Company will probably be wound down again.

There is no issue with you being the sole shareholder of the company.
 
sadie said:
Hi, I'm setting up an Ltd as I will be a Contractor for a new job.

Looked into umbrellas companies, but this way suits best.

A family member (spouse) will be the 2nd Director.

Do I need to make sure the 2nd director has less than 15% of the shares?
So that they are not a proprietary Director?

Or does it matter?
Click to expand...
Why would you have a 2nd Director?
 
Steven Barrett said:
Doubt that will even come into play. They are a contractor, so unlikely to create any value for the company, it'll just feed the salary through it, less pension contributions and mobile phone costs. Company will probably be wound down again.

There is no issue with you being the sole shareholder of the company.
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Not necessarily. There could very well be a surplus depending on the industry and economics.
 
Are you sure you are a Contractor?

Revenue have strict rules on who is a contractor and who is an employee. The recent court case on food delivery services has tightened the law in this area
 
jpd said:
Are you sure you are a Contractor?

Revenue have strict rules on who is a contractor and who is an employee. The recent court case on food delivery services has tightened the law in this area
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This is precisely the reason for setting up a Ltd company, so that the individual is an employee of their own company, which is the entity that has a contractual relationship with the party that wants the services.

There's currently no statutory provision that allows for looking through a company and imposing an employer / employee relationship on a contractor where there is a Ltd company inserted in the middle.
 
"An LTD company still needs to have a secretary and the secretary cannot be same person as the director, if the company has only one director."

Therefore there can be only one Director.
 
Excuse my ignorance but can someone list the advantages of a LTD Co structure ? If i had 200 k profit sitting in a Co account what is the advantage? I can pay into a pension but can already do that outside of a Co structure. If I need 100k out of the Ltd co to educate children I have to pay top rate tax to withdraw the money from the LTD Co whilst also having paid corporation tax last year. What are the advantages ? What happens to the Ltd Co profits if the owner passes away ?
 
You are restricted on what % you can put in your own pension as a worker, but executive pension no such restrictions.

Depends what type of company, and what they are doing but some advantages when contracting to use a ltd rather than am employee
 
If you take money out of it to buy a commercial car do you pay tax on that money first other than corporation tax ?
 
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