I have a client looking to change the existing shareholding in a company from 33.3% each to 5% and the remaining two directors at 47.5% each. Am I right in thinking as the company has only been trading since April this year it would be easiest to dissolve the shares issued and then reissue in the ratios above. In order to do this a resolution would have to be passed? Has anyone got a template I could use and then I would need to change shareholdings with Companies House? Is this the correct procedure?
Replies (5)
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You can't "dissolve" the shares already issued. They are the starting point for what you want to achieve next. You just need to arrange for the necessary transfers of shares to achieve the desired result. Share transfers do not have to be notified to Companies House, although they will of course be reflected in the next annual return.
Other implications
If these are gifts, and the transfers are to directors, then you need to consider both CGT and SDRT. Unless you can argue the transfers are in the course of normal interactions with family etc this is a transfer covered by form 42 and employment related securities with PAYE implications possible. If you can argue family connections you may need to think about CGT reporting at market value and an ER claim
Agree that there may be tax implications if the shares are not transferred at market value.