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basic question about LTD company

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seabro

seabro

Free Member
Dec 17, 2005
239
3
Cardiff
hi,

in a ltd company there are:

directors
shareholders
secretary

Who owns the company and what does it all mean?

Thanks
 
DuaneJackson said:
The shareholders own the company, the directors run it.
Click to expand...
True, and the Company Secretary is a Director who has special responsibilities.

In small Ltd companies, particularly those formed for tax avoidance purposes, the directors will also be the shareholders, the purpose being to pay them by dividends rather than salary, thus avoiding NIC payments, and having a lower tax rate.

All that is a gross over-simplification, and if you are thinking of going Ltd you should talk to a good accountant who can explain all the pros and cons.

In my experience there are pros and cons to going Ltd, and it's important to understand them both.
 
Upvote 0
Thanks guys.

I have been limited since 1997 but still don't fully understand it.

I like the security of being Ltd.

I know someone whos wife was director of his successful company and when they divorced she kept the company. :-( - now he got a normal job.

Does this mean she was probably shareholder too?

What would have happened if she was director and he owned the shares?
 
Upvote 0
Kent Manufacturer said:
...and the Company Secretary is a Director who has special responsibilities.
Click to expand...

Not entirely correct. A Company Secretary is an Officer of the Company but not necessarily a Director, even though they are both appointed according to statutory legislation.

Company Secretaries have different functions and powers to Directors, which are mainly to 'service' the Directors in meeting their obligations under Company legislation.

Here is a useful link:

Companies House - Directors and Company Secretaries
 
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seabro said:
I know someone whos wife was director of his successful company and when they divorced she kept the company. :-( - now he got a normal job.

Does this mean she was probably shareholder too?

What would have happened if she was director and he owned the shares?
Click to expand...

Most likely she was a shareholder too.

If she was just a Director (operating under a Director Service Agreement) and has no share capital then she is not likely to gain a share of the profits/losses and she would be accountable to the shareholder(s)
 
Upvote 0
seabro said:
I have been limited since 1997 but still don't fully understand it.

I like the security of being Ltd.

I know someone whos wife was director of his successful company and when they divorced she kept the company. :-( - now he got a normal job.

Does this mean she was probably shareholder too?

What would have happened if she was director and he owned the shares?
Click to expand...
Which is why you must talk to a good accountant and possibly a solicitor. This sort of situation can get very messy unless there is in place a Shareholder's Agreement which deals with what happens in the case of divorce, death, a shareholder/director wanting to leave or becoming incapacitated, etc, etc.

If you detect the voice of bitter experience here, you would be correct.
 
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