Shareholders

[ian.cd]

Hi everyone,
I've a small Ltd Co and there are just 2 shareholders - me and my (soon to be ex) partner.

The company has no assets (its a consultancy) and I am its only employee. I made my partner a shareholder so that I could legitimately pay her dividends; but now we are parting I want to take the shareholding back.

How do I do this? Is there a form that I have to register with a body like 'Companies House'? I don't want to let it lie and then have her come back at me in a few years time and make demands for cash.

Any help would be appreciated, thanks.

 

[daveashton]

Yes is the simple answer. You can get this online and you are looking for a change of directors form ( sorry can not remember is official name) but remember you will still need an MD and company secretary.

 

[ian.cd]

I don't think that's the answer! She wont be director (she's not one anway, she's my Company Secretary) but she'll still have half the shares in the company.

What I want to do is give her a 'nominal' £1 per share (4 shares = £4) and then authorise the transaction legally.

 

[daveashton]

Sorry Ian

That is a different matter. If she is the "company Secretary" as in the legal term you will still need one, and you will still need to notify companies house of the change.

That person has a lot of responsibilities and can get fined for sending information to companies house late i.e. end of year returns.

As for what you pay her, that is your choice and if she is not a shareholder unless you have a contract that says otherwise your starting point is £0.00 upwards.

As for the paperwork that is a simple case of writing out the agreement i.e. she is getting x money for y shares and agrees that she has no further financial investment in the company and that no further monies will be paid.

2 copies signed by both , doc reference number and dated.

 

[Alpha]

First point Ian is that simply giving your partner shares in a company where you are the only employee and fee earner doesnt mean that you can take the tax advantage of splitting dividends (Applying a little piece of legislation called section 660A put paid to that )

Secondly is your partner willing to give you the shares?

If so there will be no problem. The company secretary simply complletes a share transfer form for nil value and you record it in the company register.

If she requires paying for the shares then you complete a share transfer form and send it with £5 stamp duty to the relevant stamp duty office.

If she doesnt want to give/sell the shares to you then you have a problem as they are legally her property and she would then be entitled to all the benefits accruing to the shareholding.(There are ways around it if this is the case)

Lastly on points made, a private company must have at least 1 director and a seperate company secretary (A single director cannot also be company secretary)

 

[daveashton]

Hi Alan

Just a quick question. Would you not get a formal letter/ contract signed as well to ensure there is no further requests for monies later?

I was advised strongly to this and it covered everything, even salary, expenses verbal or other promises of monies etc.

 

[ian.cd]

Thanks to you both, Dave and Alan. That advice is a real help.

She's indicated that she'll be a problem over the shares, but if push comes to shove I'll empty the company bank account and start up a new company.

One things for sure, I'm not putting a woman I'm in a relationship with in such a position again! If she pulled her own weight it wouldn't be so bad, but she's been "studying" for the past 5 years.

Is there a pro-forma Share Transfer Form available that I can download?

 

[Alpha]

Dave

Re the directors side of things Yes I would ensure that if it could possibly get acrimonious and there was any form of service contract then a solicitor should draw up an agreement.(However we are not sure of the relevant details from what has been posted.

With regards to the shares the signed share transfer form is sufficient in itself to transfer the ownership.

Ian

Do not know if there are any available online it is available from legal stationers so you could try a search aloang those lines.

Re closing down the company even that must be done correctly and the details are neccessary for someone to advise you properly on the best way to do it.

 

[Ozzy]

She's indicated that she'll be a problem over the shares, but if push comes to shove I'll empty the company bank account and start up a new company.

I wouldn't do this if I was you as she could then "legally" sue you, because legally she does own half the company and is entitled to half of what is in the company bank account.

Personally, I would try and resolve this amicably (spell check) even if it means parting with some small amount of cash. If that doesn't work then speak to a solicitor.

If you want a stock transfer form I have a PDF version I can email you, just drop me a PM. I can also send you a 288a and 288b if you wish to change the company appointments manually (this can be done online but it depends if your company has been setup at Companies House to enable this). Again please do not hesitate to get in touch if you need any help with that.

 

[ian.cd]

Thanks Richard.
I've tried sending you a PM with my email address on but its stuck in the 'outbox'.

 

[Stefi]

You will also need a Resolution or meeting Minutes of the DIRECTORS or SOLE DIRECTOR, not the shareholders, to record the agreement to the transaction of the shares being transferred from her to you. This is as vital as the stock transfer form. Despite any date on the meeting minutes or resolution, the date of effected transfer will be the date of stamping on the stock transfer form. You will also need, if possible, to have the share certificate handed back (if it was issued) and cross it with CANCELLED. You will not need to notify companies house of the change in shareholding until you file the next Annual Return.

 

[ian.cd]

This is really great advice - and for free too!

Thanks to everyone who has replied and if anyone has any more advice to give, feel free.

I'd be happy to donate a small sum to charity for the advice given by contributors, maybe the moderators of the forum can set something up whereby those who have posted queries like me can donate say £20 through a 'link' to something like Save The Children.

As for my personal problems that instigated my original post, they are getting worse - it seems like she's been seeing the decorator so I've been paying him while he's been 'on-the-job' so to speak!

 

[Alpha]

Although it seems to be rather irrelevant owing to your personal circumstances I would just like to correct the post by Steffi.

There is no requirement for a share transfer to be minuted or agreed by directors under.

A share is a transferable instrument and as such providing that there are no restrictions in the memorandum or articles the holder of shares can sell or transfer whatever shares they like to whoever they like.

The share sale or transfer is effected by the transfer of the share certificate and the completion of the aforementioned share transfer form.

She may possibly be getting mixed up with the issue of shares which is a different matter altogether and not the subject of this thread.