A tipical PITA client wants to have a property from a Ltd Co.
He is no longer a director or share holder, knor is there a directors loan account with him.
He basically wants his cake and eat it..
Not my area of advise, just want to settle my mind.
The property cannot be gifted to him as I understand. It is not between family or connected persons!
He has no right in receiving any assett as he is not a creditor of the company.
To own the property, he would have to buy it.
Any support would be appretiated.
What ever happens, I will not be taking this forward.
Any insightwould be appretiated.
Replies (12)
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As my grandmother used to say “I want never gets”
Demanding to be given something precludes it being a gift. But not enough is known about the circumstances to comment further.
But why is he discussing it with you? Surely the only people that have any say are the current directors and shareholders?
But not enough is known about the circumstances to comment further.
But why is he discussing it with you? Surely the only people that have any say are the current directors and shareholders?
A "wise" man once said :
"Why is that in any way relevant to the question asked?
This forum is called “Any Answers”, not “Any Advice”."
The question, insofar as it is possible to see one, is "Can a company gift an assett".
Presumably the answer is yes, a company can gift an asset/t.
Touche.
But that’s still a rather long-winded comment from someone that allegedly doesn’t give a ****.
And, for what it’s worth, I do make a distinction between having a discussion with other advisers here and responding to queries from non-advisers (that is where I differentiate between answers and advice).
Touche.
But that’s still a rather long-winded comment from someone that allegedly doesn’t give a ****.
I used to come here for the CPD, now I just come for a laugh.
@ puzzel (OP)
(1) It appears implicit in your question that the former director/shareholder believes he is ENTITLED (whether legally and/or morally/ethically) to receive a property from the company. In intending no offence, I feel that your question should have included full information to support such belief (regardless of whether you concur with it).
I assume that you have asked him to explain his GROUNDS for such belief: could you explain those grounds, please: THIS is the central point.
(2) Clearly you act for the former director/shareholder. Given his former association with the company, may I as whether you also act for the company itself (since this would introduce a conflict of interest aspect into the enquiry, albeit I understand from your question that you will not be providing formal advice to him).
(3) Interpreting your enquiry as your asking whether the company is ALLOWED to gift a specific property to your client, this question can only be answered with a “yes” if there are there are no company rules (including the Articles) and/or Companies Act rules, which prevent such gift. For example, the gifting of the property could be a breach of the current directors’ fiduciary duties, and/or could be prejudicial to the interests of outside parties (including creditors); in such event, the answer would be “no”.
Basil.
In other words,
“Can a company gift an asset?” Yes.
“Can a company gift an asset without consequences?” Probably not.
As Basil points out, yours is a legal question.
By drawing your attention to the fact that this is a tax and accounts forum, I have no intention to bully, or to be seen as bullying, you. I am merely drawing your attention to the fact that respondents speak with less authority on this subject than they do on tax and accounts matters.
A couple of points:-
1] Tax- this is not an arms length transaction , so the Company would be liable to
CT on a deemed disposal of the land at market value see TCGA92/S17 (1) (a)
ii] Is company empowered under its Mem & Arts to dissipate its assets by making a gift?
What if the company becomes insolvent shortly after the gift?
What if a shareholder objects-sounds like a lawyer's beanfeast.
Any Insolvency Practitioner ultimately appointed can pursue the Directors and recipient for recovery.