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incorporating a company for likely joint venture

incorporating a company for likely joint venture

Client will likely pursue a joint new business undertaking with one other person.

Details of the 'agreement' between them is still to be finalised but client wants

to set up a new company asap because he is worried the particular company

name he desires will be taken if he delays.

My questions are ;

1. are there any tax downsides at all of setting up the new company with just

my client as shareholder and soon transferring half of shares to other person

at nominal value ?

2. assuming we do proceed as 1., is there any tax difference at all between

A. transferring 50 of 100 existing shares to other person     or

B. allocating 100 new shares to other person ?

Thank you.


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