ICAEW and member firm requirements

Shareholding

Didn't find your answer?

Hi I have a member firm.

Husband and wife scenario - husband is qualified and holds practicing certificate and is a director holding 85% equity shares.

wife works in practice providing bookkeeping and payroll support and receives a salary and 15% shareholding. Not a director, not qualified, not acting as a principal.

if say 35% shareholding was transferred so it was 50/50 would it still fall under the requirements to be called a member firm?

i believe it would be as the regulations say 50% or directors/principals. But I would just like to make sure. Or would it be best to have a 51/49% shareholding.

we have built the business up together even though I have the managerial role but I would like it to be 50/50 if possible.

many thanks 

Replies (9)

Please login or register to join the discussion.

David Winch
By David Winch
18th May 2018 08:06

I believe ICAEW members must hold MORE THAN 50% of the shares.
David

Thanks (0)
Replying to davidwinch:
ALISK
By atleastisoundknowledgable...
18th May 2018 08:39

ACCA say members with a PC must hold >50% of the voting rights.
I assume that ICAEW will be the same.

Thanks (0)
avatar
By Grayson Moore
18th May 2018 08:39

As per the ICAEW bye laws an ICAEW member firm is defined as:

any body corporate (other than a limited liability partnership) engaged in public practice of which 50 per cent or more of the directors are members; and more than 50 per cent of nominal value of the voting shares is held by members; and more than 50 per cent of the aggregate in nominal value of the voting and non-voting shares are held by members.

Thanks (0)
avatar
By Joe Soap
18th May 2018 10:00

So you need to look at your share structure and have some shares with a low nominal value and low (or no) voting rights but rights to dividends that optimise you tax positions.
Not impossible!
Is that what you are getting at?

Thanks (0)
avatar
By bernard michael
18th May 2018 10:11

In any event keep the majority

Thanks (0)
7om
By Tom 7000
18th May 2018 10:20

call them and ask... they are helpful

Thanks (0)
Red Leader
By Red Leader
18th May 2018 12:59

When I contacted ICAEW about this, the answer was it had to be >50%, so 51/49.

Thanks (0)
avatar
By essex accountant
18th May 2018 13:47

I had 100 ordinary shares issued - 80 to me (Chartered) and 20 to my wife (not qualified). I then issued 100 A shares non voting to my wife. As I had 80 of the issued shares and my wife had 120, I was in breach of ICAEW rules, even though I had 80% of the votes and so had control. The solution was to increase the Ordinary shares issued to 500. I then had 400, my wife 100 plus 100 A shares. So I had 400 shares and my wife had 200. I had more than 50%!

Thanks (0)
avatar
By Matrix
18th May 2018 13:50

I agree with the above regarding shareholding. If you wanted to appoint the wife as a Director then you could apply for a dispensation to still use the Chartered status but it would cost you.

https://www.icaew.com/-/media/corporate/files/members/regulations-standa...

Thanks (0)