I have a new client, they're a Limied company, a micro entity, the directors and shareholders are husband and wife. The previous accountant did a SH01 and minutes for a gernal meeting to change the structure of the shares as follows:
100 Ordinary shares owned by wife. Each share is £1 and is entitled to one vote per share and is entitles to share equally in dividend payments
100 Ordinary B shares owned by husband. Each share is £1 and is entitled to one vote per share and is entitles to share equally in dividend payments
My client said this was done becuase the husband is a higher rate tax payer and doesn't want to receive dividends over the £2k threshold. I know dividends can be declared to shareholders holding differnt types of shares but as the shares have the same rights on dividend payments is it ok to only pay dividends to the wife? I thought that shares had to have different rights to be able to declare dividends to one shareholder and not the other? I have requested the client to send the company's articles of association to me which are with their solicitor but still waiting...