Hello accountancy experts.
I've recently founded a small company selling software. I issued 100 shares (£1 each) to myself on formation. I now want to issue 8.5% to someone I want to bring into the company. The shares are instead of a salary, he will receive annual dividends.
I've got the SH01 form, and I have a share certificate which I made myself. Do I just need to fill in the form and issue the new shareholder a certificate? Also, can I issue half a share?
Many thanks for your help. Dave.
Replies (5)
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To give someone 8.5% ...
... you would need to issue 9.28961 shares!
I suggest you issue them 17 shares and yourself a further 83, this would give the desired holdings.
You articles will tell you how to issue shares, you will at minimum need a board minute alloting the new shares, assuming the directors have the power to do so.
(9 shares would give them 8.25688%, 8 would give them 7.4074%, and 10 would be 9.0909%)
Did you get any tax advice?
This arrangement could put your "employee" squarely within the Employment Related Securities regime.
dividend amounts
Have you thought about the way dividends work? If all the shares are the same type and you want to pay him £1,700 in dividends (on 17 shares) you will get £18,300 on your 183 shares. Is this what you intended?