Is making hubby a director going to be easy?

kathy_b_2

I set up a company 6 months ago, which thank goodness, is doing quite well. I'd really like to bring in my husband as a director. He's doing lots of good work for the company and it seems to make sense from a dividend / tax perspective. Is this easy to do? Not sure where to start.
Thank you

Horace

Speak to your accountant as they would be able to say whether or not it is easy to do or not. Unfortunately, I have no idea of the logistics of such matters.

Savvy_Sue

If this is a limited company, do you not have an accountant who could advise you about this? Because the answer may be 'it depends'!

It's possible one of the those who knows more about this may be along later!

Vomityspice

What do your articles of association say?

Normally existing directors can vote in a new director at a board meeting or alternatively it can be done at a shareholders meeting (in your case probably the same people!).

Note there are rules about service contracts over 2 years.

You need to speak to an accountant / solicitor to clarify.

Premier_2

Assuming this is a limited company you set up, yes refer to your article of association as to how directors are appointed.

If you are the current sole shareholder and sole director this is going to be very easy.

Log onto the companies house website and complete the form appointing a new director. Job done (apart from some company minutes you should probably have confirming the appointment of a new director, but I doubt anyone will ever be interested in that).
http://www.companieshouse.gov.uk/forms/generalForms/288A.pdf

Edit: Don't confuse directors with shareholders.

Shareholders own the company and may be awarded dividends as a distribution of any profit the company makes.
Directors manage the company on behalf of the shareholders, and are usually employees of the company being paid under PAYE rules.

sunshinetours

Definitely speak to your accountant as appointing a director and shareholder, whilst generally a pretty easy process for small companies, can have effects on overall tax positions

If you haven't got an accountant then get one pretty sharpish (IMO of course!)

kathy_b_2

Thank you all.
Hmm might be an idea to explore that shareholder option.
I'll get in touch with my accountant right away.
It is a limited company and I'm the sole director at the moment.
Hopefully (if it's worthwhile) it'll be pretty painlesswhatever we decide.
Cheers y'all
Good response as ever

Shall post the outcome.
x

easy

Kathy I agree you need to speak to a professional about all the implications of this.

Do you want hubby to be a director, or simply a shareholder so he can receive dividends?

You might like to look at this website http://www.franklyaccounts.co.uk/limited.php which has lots of helpful advice.
(I have no connection with the above, just find it useful).

Vomityspice

kathy_b wrote: »

Thank you all.
Hmm might be an idea to explore that shareholder option.
I'll get in touch with my accountant right away.
It is a limited company and I'm the sole director at the moment.
Hopefully (if it's worthwhile) it'll be pretty painlesswhatever we decide.
Cheers y'all
Good response as ever

Shall post the outcome.
x

Being a Sole Director you have ensured you have complied with all the additional requirements in the Companies Act???? There are a few so best bet is to have a longer chat with your accountant......

Where only one director holds office, article 7(2) of the Model Articles disapplies any provisions of a company's articles relating to decision making by directors, provided the articles do not specify that at least two (or more) directors are to hold office at all times.

If the articles do specify such a minimum number of directors, a sole director may only take decisions for the purposes of appointing further directors (article 17(1)(b) of the Model Articles) or calling a general meeting to allow the shareholders to appoint further directors (article 17(1)(a) of the Model Articles). In the absence of a provision requiring the company to have more than one director in office, a sole director will be free to take any decisions he sees fit (subject always to his general duties to the company and to any direction of the shareholders given by special resolution under article 4 of the Model Articles).

In such case, it may be prudent to clarify article 15 of the Model Articles, so that decisions taken by such sole director must be recorded in the same way required for majority or unanimous decisions. Certain provisions of the model articles (for example, article 14(1)) and of the Companies Act 2006 (for example, section 175(6)(a) of the Companies Act 2006) do not allow particular directors to form part of the quorum in specified circumstances

Premier_2

Vomityspice wrote: »

Being a Sole Director you have ensured you have complied with all the additional requirements in the Companies Act???? There are a few so best bet is to have a longer chat with your accountant......

As the limited company was only incorporated 6 months ago, one would hope whoever created it ensured it complied with current legislation, either specifically to suit the OP as she planned to run it or in such a general way so as to be used however the company wanted

Some companies have operated for years with a sole director (although they would have required a separate company secretary before the revised companies act came into force)