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