Advice needed re a director's redundancy.

foxy_starlight

I'm a co-director and joint shareholder of a small company.
The recent economic climate has weighed heavily on my fellow director and he has been quite stressed and unwell with the whole thing.
He wishes to take, in effect, early retirement from the business and pursue lighter, more part-time and less stressful work elsewhere.

He has asked to be made redundant although to me it appears to be a simple resignation.
I'm happy to value the company and buy his share from him but the 'making him redundant' feels a little fraught with potential pitfalls that I haven't yet considered.
To me it appears a ruse just to avoid NIC and tax and I'm a little out of my depth.
The whole issue of shareholders, directors, the company and it's obligations is not my field of expertise.
It this sort of thing usual or am I just worrying for no good reason.

Any comments welcomed!

Googlewhacker

Go see a solicitor, it seems quite messy.

getmore4less

Looks like it could get complicated.

Found this article
http://www.business-lawfirm.co.uk/Articles/Company/Director-Redundancies.aspx

plenty more out there,

Do you have employments contracts as well as your other legal duties as directors and shareholders.


One angle might be to buy him out first and him give up everything other than being an employee .

foxy_starlight

Thank you both.
There's no nastiness or anything but I have this visions of grief from the taxman in a few years time.
I'm quite happy to value the company and buy his share.
I'm guessing he's then liable to be taxed on what he receives hence the 'redundancy' tag.

Googlewhacker

for the sake of a few hundred quid (which you could split the cost with your other director) I again urge going and seeing a solicitor to make sure you don't fall into any pitfalls etc