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Directorship

Is there any reason why a husband and wife company shouldn't only have one director?

They have some (maybe over-)concern that if the director were sued that if only one were a director, the wife's property would be safe. They would be 60:40 shareholders.

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31st May 2012 12:19

entrepreneurs relief

To claim entrepreneurs relief, they need to have either been a full time employee or an officer of the company in addition to holding >5% of the shares.  So if wife is not a director she may not qualify for ER on a share disposal.

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By RG
31st May 2012 12:45

change later?

but if she became one before disposal would that remove the issue?

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01st Jun 2012 08:54

I'm handling a case where there was only director - he died intestate and we can't access the company bank a/'c from which the household income was derived, which leaves the widow in severe monetary difficulty.

Make the wife a director yes but not necessarly an equal shareheolder

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01st Jun 2012 16:38

One year

I think she needs to hold the position for a year to qualify for ER - mind you, being Company Secretary would do the trick too, with less responsibility attached.

Bernard raises a good point though - and I have had a scary number of seemingly fit clients die without warning over the years....

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11th Jun 2012 10:56

Company Secretary

Taxbound,

 

Would you helpful suggestion of the wife just being a company secretary (with signing powers at the bank) not deal with the husband's pre-mature death isse, too?

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11th Jun 2012 10:57

Bernard's comment

Is spot on but as taxhound says making the spouse Company Secretary lowers the risk.  Or indeed could just be an employee for entrpreneur's relief.

I have also discussed with a solicitor whether an enduring power of attorney or an everlasting power of attorney would work.  If the director or for an LLP the partner/member would be suffucient.  He indicated that it would not.  Has anyone else had experience in this area too.

Also consider the IHT business property relief regs.

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11th Jun 2012 17:23

slight twist

What would the situation be in the event of husband's death when he is sole director but each spouse owns 50% and both are sole signatories at the bank? We have a client who has raised this very question in regard to estate planning. 

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By RG
11th Jun 2012 17:34

Get a will done...

I don't think that there is a problem if there is a will. I called my bank and got told this?

With regards to limited companies the procedure depends whether there is more than one director named at Companies House.

If it is a sole director the executor the will would firstly contact Companies House and follow their bereavement procedure. Once this has been done the executor would usually become name as the sole director until the deceased’s estate has been settled.

 

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11th Jun 2012 20:49

Re slight twist

It is not the director who appoints the signatories but the company.  I dont see any problem with the surviving spouse signing cheques.  It would only be company matters that would require a director's signature.

The surviving shareholder I believe under the companies acts can call a meeting and at that meeting she as the only shareholder can appoint a new director

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