Who 'owns' the Company

Malthusian wrote: »

... If the family member is not a spouse it can't be a tax planning strategy because giving away 100% of the income to a child to avoid 7.5% in tax makes no sense.

No relevance to my post at all.

Who said it was "giving away"? Who was talking of "100% of the income". Who assumes that it avoids 7.5%?

And, come to that, who isn't a child?

As mentioned above, there is no requirement for the recipient of shares to confirm they have received them, or even asked for them.

However, a shareholder should receive a share certificate (although this sometimes doesn't occur , which is wrong)

Also the company should hold a register of shareholders and transfers.
Transfers are made via a Stock Transfer form

The register is required to be kept up to date, and shareholdings also need to be declared/confirmed annually to Companies House with the confirmation statement.

Share certificates need to be issued under the seal/director(s) signatures.

The company register also includes a log of who signed what and when.


As regards to holding a share in a company, usually there is no detriment.
The share is usually worth something, at least the nominal value. Sometimes a lot more, depending on how well the company is performing.
But ultimately, like everything, it is only worth what someone else is prepared to pay, so perhaps nothing.

It would only usually be worth nothing if the company has run out of money.

In such circumstances, the liability of the shareholder is limited to the nominal amount shown on the share certificate. In this case I understand £1 each, or £20 per shareholder as it presently stands.

Shares are usually fully paid, but may not be. If they were fully paid, and were then gifted to D & E, then D & E can lose nothing by holding them.
If unpaid, or partially paid, in theory D & E could be asked to pay the outstanding amount of up to £1 per share if the company collapses.
(but as indicated above, if it came to that, and the shareholders denied knowing they had the shares, legal questions would be made of the directors who authorised the share transfer, and signed for it (even if only under a company seal)

In regards to Mems & Arts, they are issued when the company is incorporated and filed with companies house. It's usually the very first filing in the list.
Assuming this is a UK company, then you should be able to find it here:
https://beta.companieshouse.gov.uk/

Find the Company > Filing History
... then look for the first entry. It's probably part of 'Incorporation' documentation . But do check they haven't been revised at a later date, which would also be found in the filing history.

If it's an old company (e.g. over 20 years old) the old documentation may not be available online, but it should be shown with details of how to order a paper copy (a small charge applies to paper copies)

To transfer a share you own to someone else, you (or your legal agent, such as your solicitor, etc) as the current owner has to sign the Stock Transfer Form.

One other thing you may wish to check is that all shares are of the same class. Different class shares can have different rights, including % of ownership, etc.

castle96 wrote: »

No, not key employees F does everything. A B C would always support him. The only person that receives an income is F. So none of the shareholders do anything or receive any reward. Can understand this for A B C as they are his sons, but why D E? If F died, the value of the Company is at the disposal of ABCDE equally ? whatever F's will may say.
Still cant undertand why D E would not know they are shareholders until they are told - what would F's reason be to include D E in the scheme of things when they are not his sons

Directors.

In law, you are either a company director or you are not. Company directors are only those that are registered at Companies House as such (for UK companies).
Some businesses may call their managers 'directors' perhaps to make them feel important, but they may not be company directors.

Company directors have legal responsibilties associated with that role.

Whilst Companies House class all company directors as the same, the company may have a Managing Director, Chairman, CEO, etc.
These actually have slightly different definitions and roles, but the MD which is what you often may have in a small, family run company would usually have the overall control, despite there being other company directors.

This is where the mems & arts may help you understand how the company is legally run.