MVL distribution shareholders entitlement MVL distribution shareholders entitlement - Page 2
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  1. #11

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    Quote Originally Posted by northernladuk View Post
    Is it your account(ant) that suggested this mess in the first place?
    I'm inclined to agree with this. I'm guessing someone who didn't really understand different share classes recommended them. They didn't bother to carefully think through what rights that new class would have. Instead (as many do) they just thought by giving them a different letter means you can pick and choose whatever you want whenever you want in terms of their rights.

    The liquidator is now in the awkward position, of seeing there being different share classes, without clear written rules on what their entitlements are. The liquidator won't care or want to get involved in the debate, but equally they don't want further down the line either shareholder to try to lodge a claim against the liquidator if that shareholder thinks they should have got more. Hence they just want you to confirm, in writing for their records, what you believe the situation to be. They'll then follow that.

  2. #12

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    Quote Originally Posted by Maslins View Post
    I'm inclined to agree with this. I'm guessing someone who didn't really understand different share classes recommended them. They didn't bother to carefully think through what rights that new class would have. Instead (as many do) they just thought by giving them a different letter means you can pick and choose whatever you want whenever you want in terms of their rights.

    The liquidator is now in the awkward position, of seeing there being different share classes, without clear written rules on what their entitlements are. The liquidator won't care or want to get involved in the debate, but equally they don't want further down the line either shareholder to try to lodge a claim against the liquidator if that shareholder thinks they should have got more. Hence they just want you to confirm, in writing for their records, what you believe the situation to be. They'll then follow that.
    Well at least we now have an example of how not doing it properly in the first place can cost you I guess... Hopefully for the OP this isn't the only issue we can take an example from and he get's it shut before HMRC come sniffing.
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  3. #13

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    Quote Originally Posted by Lance View Post
    That might be the case but it's not obvious.
    When the shares are a different class you cannot just compare them as equal and say he has 80% and she has 20%.
    And there may be 1 class A share, and 1,000 class B shares. I've seen that setup before.
    Technically you're right but when someone says he owns 80% and his wife 20% with different share classes, and he's obviously not a corporate lawyer or the like, I'd say it's obvious. This is the Internet, not the boardroom.

  4. #14

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    Quote Originally Posted by mrdarcey View Post
    @WordIsBond - very good point about ER. she's not a director or a secretary, we haven't considered ER on her distribution yet but as per what you said I am assuming she wouldn't be eligable.

    It would work out better with her being able to claim ER 10%, and slightly better with 20% CGT - as opposed to all capital distributed to me.

    In the company shares article, there's clear distinction between her shares and mine. Hers only mention "flexible dividend rights" - while mine has voting rights and right to capital.

    That is why I don't understand the liquidator's approach to it, and whether it's up to me to decide otherwise, and how does my acocuntant advice fit in all of this.

    I am yet to hear back from my accountant.
    I'm too lazy to look it up, you can google as well as me, but pretty sure she wouldn't be eligible.

    Little doubt Maslins has described exactly why you are getting conflicting advice.

    So, from what you said, her take is between 12-24K. 12K of it she'd pay no tax (as opposed to the 10% you'd pay), saving you £1200, and the rest she'd pay 20% (instead of the 10% you'd pay), which eats into some of that £1200.

    I wouldn't do it. I wouldn't touch it at all. From what you've described, what you gain from distributing to her is not enough to justify the risk that HMRC comes along and not only charges penalties but perhaps even starts to look askance at the whole MVL. Who knows what they can make up, er, find, when they have decided you are a bad actor?

    I just wouldn't do it. If Mrs would be getting £20K then your whole deal is around £100K, and your tax on it just isn't that much. Distribute it all to yourself. Ask your accountant why he had you set up the shares that way and didn't have you make Mrs a company officer, and point out how much tax you've lost as a result. Express your extreme unhappiness and throw a fit and ask him who his PII is with.

    Then, whatever he says, take the Mrs out to dinner that night and drink to his health and the liquidators, and then take a cruise to celebrate the whole thing.

    But don't mess with HMRC over £1K on a £100K deal.

  5. #15

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    Quote Originally Posted by WordIsBond View Post
    Technically you're right but when someone says he owns 80% and his wife 20% with different share classes, and he's obviously not a corporate lawyer or the like, I'd say it's obvious. This is the Internet, not the boardroom.
    *cough* pscont *cough*
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  6. #16

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    Quote Originally Posted by Lance View Post
    *cough* pscont *cough*
    Can't be. No dog, kids, grandad with shares.
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  7. #17

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    Quote Originally Posted by Maslins View Post
    I'm inclined to agree with this. I'm guessing someone who didn't really understand different share classes recommended them. They didn't bother to carefully think through what rights that new class would have. Instead (as many do) they just thought by giving them a different letter means you can pick and choose whatever you want whenever you want in terms of their rights.

    The liquidator is now in the awkward position, of seeing there being different share classes, without clear written rules on what their entitlements are. The liquidator won't care or want to get involved in the debate, but equally they don't want further down the line either shareholder to try to lodge a claim against the liquidator if that shareholder thinks they should have got more. Hence they just want you to confirm, in writing for their records, what you believe the situation to be. They'll then follow that.
    That is likely the case, although the liquidator is not following what the accountant advised and th3 information I provided as part of information gathering when I was asked who is entitled to distribution.

    The liquidator is basically saying that my wife is entitled to distribution as per her shares, and that if I want to proceed otherwise I need to send them confirmation that I dont want her to receive any distribution.

    The liquidator explained that noting in the share articles restrict her from receiving captial distribution.

    Funny enough I had a quick call with my accountant, who said that this is the liquidator's domain and there advice would be correct, and that they will request furthest clarification from the liquidator - looking forward to seeing that.

  8. #18

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    Maslins must be offshore on his yaght at the moment...
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  9. #19

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    He'll have spilt his champagne reading that!

    Quote Originally Posted by northernladuk View Post
    Maslins must be offshore on his yaght at the moment...

  10. #20

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    Quote Originally Posted by northernladuk View Post
    Maslins must be offshore on his yaght at the moment...
    Sadly Maslins is currently glued to his desk/phone explaining to person after person that if they're still contracting until the end of March we can't somehow have completed the liquidation of their company by 11 March 2020

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