Ltd structure

Koksmanareikals

Hi. I would like to find out more about LTD structure before I setup one.

How to setup LTD structure so later I can pay different amount of dividends to shareholders?

1. Lets say company makes £70,000 revenue in a year
2. There is 2 directors on Payroll £12,570 p.a. and 1 shareholder which is not on employed
3. £70,000 - £25,140 (salaries) = £44,860 profit
4. £44,860 - 19% Corp Tax = £36,336.6

And then I would like to split this total to share holders like this:
Director1: £26,336.6
Director2: £9000
Shareholder3: £1000

Is it possible to divide dividends like this? What type of shares should I choose?

TIA

DullGreyGuy

And what happens next year when the profit drops to £25k?

What is your reasoning for the split?

Koksmanareikals

DullGreyGuy said:

And what happens next year when the profit drops to £25k?

What is your reasoning for the split?

Reason for the diferent amount of dividends is taxation.

Lets say when Director1 reaches higher tax rate then dividends is paid to Director2. And then 1k dividends to shareholder because it's tax free.

Take into account all this company is owned by family members.

Grumpy_chap

The OP would need to take professional advice from an Accountant.
HMRC can look unfavourably on "alphabet" share arrangements.

Is the proposed "shareholder 3" the OP's child?  The child will then own a proportion of the business and the dividend so paid belongs to the child and is not under the control of the OP.

toby3210

If you plan to divide dividends in that proportion year on year then common shares are fine.