Company Share Restructure

[MustangGT]

I work for a limited company with two owners/directors. They are looking to restructure the share capital for personal reasons. Would I be correct in thinking the company should not bear the cost of this, because it has no direct benefit to the company?

[bennno]

How is it relevant to you if you aren't one of the directors?

[J77wck]

If it privately owned it's theirs to does as they please.

[jeremyc]

It is only the limited company that can restructure the share capital, under the terms laid out in their Articles of Association. Therefore it's only the company that can pay whatever fees or costs arise in doing so.

Whether the company then chooses to charge their shareholders and/or Directors for carrying out the restructuring is a decision for the Board of Directors (again in line with the Articles of Association).

[Mr Pointy]

bennno said:

How is it relevant to you if you aren't one of the directors?

Maybe his bonus is related to the profit declard for the year & the directors have decided this share re-arrangement is a very expensive expense for the company?

[MustangGT]

Mr Pointy said:

bennno said:

How is it relevant to you if you aren't one of the directors?

Maybe his bonus is related to the profit declard for the year & the directors have decided this share re-arrangement is a very expensive expense for the company?

It is because I have been tasked to get it sorted.

[Panamax]

External legal/accounting advice strongly recommended.

[dave123456]

MustangGT said:

Mr Pointy said:

bennno said:

How is it relevant to you if you aren't one of the directors?

Maybe his bonus is related to the profit declard for the year & the directors have decided this share re-arrangement is a very expensive expense for the company?

It is because I have been tasked to get it sorted.

I’ve been in this situation, and it was relevant for a variety of reasons.

You will find that irrespective of where the costs should be borne they will be paid by the company. The two areas that may require further diligence are the corporation tax return and any bonus calcs where you could be affected.

If it’s anything like my experience I found the shareholders, for whatever reason, seemed happy to spend money inefficiently in the business because there were slightly more specific restrictions around their extraction via salary and dividends.

[MustangGT]

dave123456 said:

I’ve been in this situation, and it was relevant for a variety of reasons.

You will find that irrespective of where the costs should be borne they will be paid by the company. The two areas that may require further diligence are the corporation tax return and any bonus calcs where you could be affected.

If it’s anything like my experience I found the shareholders, for whatever reason, seemed happy to spend money inefficiently in the business because there were slightly more specific restrictions around their extraction via salary and dividends.

Exactly. I am tasked with sorting it out and reckon if the company pays it needs to be excluded as applied to the Corporation tax return.

panamax said:

External legal/accounting advice strongly recommended.

Yes, agreed. I am in the process of getting a solicitor involved, our accountants said 'No'.