Trying to keep things as brief as possible, I've just taken a client from an unqual (who actually masqueraded as fca, but that's another story).
Husband & Wife Limited Company- both are directors and wife is secretary. So far so good- ish.
My main concern is the shares issued- Company now 3 years old and the original mem & arts just say " £1 ordinary shares". Husband subscribed one share.
But the last two Annual Returns and Accounts clearly show one "A" ord for husband and one "B" ord for wife. "B" ord does not participate in any dividends.
There's no sign of anything anywhere about the changes in the classes of shares and I'm now beginning to think my predecessor just dreamed it up probably when Arctic Systems was grabbing headlines.
The client has no paperwork at all, and no recollection of anything just says "the Accountant dealt with all that"......
The former accountant left a trail of utter devastation and errors in his wake. I've been so busy rectifying everything else I'm now in brainfade. Former accountant has not replied to any correspondence from me.
What am I missing here? Or have Companies House also missed these "new" shares?
And if this is dreamwork, my question is..... How does it get rectified?
Replies (9)
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Have any SH01 / 88(2) forms been filed at Companies House? I'm assuming not from your post.
What do you want to achieve?
Do you want to keep the B shares? If not, I think I would simply file an amended Annual Return and restate the comparatives in next year's accounts. Someone might say I'm over-simplifying it though!
What do the Articles say?
If the client doesn't have a copy, you can order them for £1 from Companies House. If the Articles make no mention of A & B shares and mention only one class of ordinary shares, the company does not have two classes of shares and nothing in previous Annual Returns or accounts can over-ride that. You just have ordinary shares.
As Sarah says, you can just re-state them as 2 ordinary shares on the next Annual Return and accounts. If you want to get it straight at Companies House before the next anniversary of incorporation comes up, you can file an early Annual Return now (you cannot amend a previously filed return) which will become your due date for annual returns in future. If the wife is not to be paid a dividend, despite it often being a useful tax saving, you will have to put a proper waiver in place before the next dividend is declared or amend the Articles to allow for A & B shares ranking pari passu except that different dividends may be declared.
shares
I thought there was only one share issued not two. If theres only one then it belongs to the husband and he gets all the dividends and he has his tax returns wrong and hes in a pickle and you have to charge him lots of fees to sort it out...
Artic Systems ?
I think you may be giving said non accountant more credit than is due.
I would say he probably had absolutely no idea what he was doing.
Probably copied another set of accounts in 4 minutes flat and raised an invoice.
Have you complained to the ICAEW if he has been using the chartered badge I am sure they would take issue.or try trading standards. Is using FCA when you are not fraud ? POCA ? SOCA?
Your client ought to make a complaint too !
From experience you will be unraveling things for years ! Good luck make sure you charge the right fee as your good work will be forgotten when the tax bill arrives.