Small company taking on new member(s)

Small company taking on new member(s)

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A company with 2 director / shareholders wishes to expand by issuing shares to friends or relatives who would be working for the company. All shares will be ordinary with identical rights. New arrivals will be made company secretaries, to avoid having to pay NMW. The company is not liable to IR35, has no assets other that some IT equipment (some will be introduced by new shareholders) and goodwill is personal.

1. Any caveats?

2. What if new shareholders receive unequal number of shares to reflect their anticipated usefulness to the company?

Thanks for your help!

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By WhichTyler
16th Jun 2015 20:43

Yes
1. Get your lawyer to draw up shareholders agreement and your accountant to explain the tax treatment to all concerned.

2. What indeed? if you put tax efficiency ahead of management efficiency, there are all sorts of interesting consequences. What if a shareholder gets pregnant/has long term illness/deserves a bonus? Share allocation has some advantages but isn't the best way to handle all of lifes ups and downs...

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By Ray Levy
18th Jun 2015 15:49

New Shareholders

 A shareholder agreement is crucial, as the owners need to be able to take back the shares in specific circumstances, and regulate what rights and obligations are expected from the new shareholders.

I would need some more detail to give you an answer as to the legality of all of this.

But happy to assist, if you want to get in touch.

Ray

 

[email protected]

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