Company Directors

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  • #44349
    liztelford
    Participant

    Hi all

    I have a claim from a company director who is the only director of a newly formed garage business.  There are two shareholders – himself and another.  They both hold 50 shares and paid £1 each for these shares.  Claimant has stated he will not be paid any salary for at least 6 mths.  What further information do I need to ask for to be able to assess his share in the business?

    #125565
    peterdelamothe
    Keymaster

    As a Director he is an employee not self-employed so you need to ask him:

    a) how much he expects to earn over the year as an employee (whether actually paid or not). He should have a contract and wage slips as any other employee (his accountant will deal with this)

    b) how much cash was invested in the company by him, his partner and any others.

    As a start-up business the company is unlikely to make profits for a while of course and may indeed be worthless but that is not the main point of asking. Plenty of cash is being hidden away within companies and then claims for benefits being made. See thread from yesterday…. https://hbinfo.org/forums/topics/company-directors-6

    Dont worry about the 100 times £1 shares. When you set up a limited company, you are required to set some purely nominal amounts and these figures are standard. You dont pay these amounts. You pay to set up a company and this may be less than £20….

    http://www.companiesmadesimple.com is an example of how cheap it is.

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