Limited Company

Limited Company

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My client is one of 4 equal directors in a limited company. Can he put his part of assets in the company in a trust for his son? If so, how can he do that and how does it if at all affect the other directors.

Anon

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By User deleted
02nd Jul 2008 16:57

Hang fire
Anon

First of all, what is the nature of your question? Is the business valuable?

Why does he want to put his shares in trust - is he personally insolvent, or is it to mitigate inherience tax?

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By User deleted
02nd Jul 2008 13:43

Muddled thinking?
Your client does not have "his part of the assets of the company".

The company has assets (probably) and your client has shares in the company.

Whether he can put those shares in a trust for his son (or for anyone else) will depend on any preemption rights that there may be in the Articles of Association

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By AnonymousUser
02nd Jul 2008 12:39

Needs proper advice
You refer to him as an equal director - do you mean he is a director and an equal shareholder?

Subject to any restrictions in the articles of the company and any shareholders' agreement, your client can do what he wants with the shares. However, bear in mind that the trustees have a duty to act in the interests of the beneficiary ie the son. His interests may not coincide with actions the father - who will presumably be remaining as a director - may want the company to take, or indeed that the other shareholders may want - and a 25% interest is significant in a private company.

You ask how he can put the shares into trust. In simple terms, you draw up a deed, trustees are appointed and the property is transferred. But trusts are a complex area of tax and general law and no planning involving them should in my view ever be taken without proper professional advice.

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