New Startup - my partner has a CCJ

[samjeffs]

Me and my partner have recently started our own limited company which will be selling products from a wholesale distributor. We are currently both in full time employment (myself in the Royal Navy and my partner in the British Red Cross).
My partner has a CCJ against his credit record which is in dispute owing to an error on the bank's behalf.
We decided to incorporate our new company with myself as the sole director and shareholder so that we would be in a reputable position to apply for a business bank account and a business loan if required.
How do we go about ensuring that my partner and I can both be paid equally from the company without looking like a tax avoidance scheme, of which this is NOT, and also have my partner own part of the company without affecting any possible credit checks.
My thought was to create a contract between us stating this fact however how would that sit legally and with Companies House, or the taxman at that?
We would both like be equal partners in our company but we don't want to hinder our chances of being accepted by any lenders or other companies.

Any help would be most appreciated!

 

[mhall]

If you are a Limited company, you and your partner are employees and will be paid through PAYE.
Your partner can also be a shareholder. Only if the company asks for credit can the CCJ have any effect and even then, the banks will ask for a Directors guarantee, not shareholders guarantee so I can see no reason why a CCJ will effect the company at all.

 

[Simon-M]

Pompey or Guz?

 

[businessfunding]

Your bank will want to search directors and shareholders prior to opening an account. Anecdotal evidence is that they are often refusing accounts - even where no borrowing are required - if there is bad credit history, so you are probably right to do it this way.

Your partner could go for a nominee shareholder or your could draft a suitable agreement between you.

When it comes to borrowing it is more complex since, as sole director / shareholder, you will be required to guarantee the deal so will be carrying 100% of the risk (in actual fact guarantees are joint and several, so you technically carry the full risk any way). Again, you might be able to create a binding agreement to mitigate this.

Your earnings will presumably comprise salary and dividends. Salary can be paid equally without any problem, whereas dividends should be distributed equally between shareholders, which might cause a problem. (Your partner could take an equivalent sum as bonus, though it will be less tax efficient)