Hi new member here..
I have a question about being a part owner of a company and also being paid by that company as a freelancer.
I'm a standard self employed web developer (trading under my own name) and have several clients, all small businesses.
With one of those people, we have set up a Ltd company to develop a project. It's owned 50/50 by myself and this other person but payments in to it are erratic and it currently operates on a shoe string.
I need to get paid for my time but the other person insists that as the company is 50/50, he must take out a matching amount when a dividend is paid.
He doesn't spend the amount of time on it that I do and agrees I need to be paid more right now. But there's too little to pay a salary.
We both hope it will generate decent sums and at that point 50/50 is fine, but right now I need to bill for my time as a freelancer - he insists this is against the law.
We don't want to get into having the acocuntant advise as the shoestring is near breaking point.
Can we keep changing the ownership shares so it goes 80% to me, 20% to him, till we get to an income of 'x' and then it goes back to 50:50?
(with a sliding scale in between)
We're not looking for cunning tax avoidance deals and personally I prefer simple self employment versus dividends, but the business idea is essentially sound.
Any other ideas or simple solutions to this?
Many thanks for any input
I have a question about being a part owner of a company and also being paid by that company as a freelancer.
I'm a standard self employed web developer (trading under my own name) and have several clients, all small businesses.
With one of those people, we have set up a Ltd company to develop a project. It's owned 50/50 by myself and this other person but payments in to it are erratic and it currently operates on a shoe string.
I need to get paid for my time but the other person insists that as the company is 50/50, he must take out a matching amount when a dividend is paid.
He doesn't spend the amount of time on it that I do and agrees I need to be paid more right now. But there's too little to pay a salary.
We both hope it will generate decent sums and at that point 50/50 is fine, but right now I need to bill for my time as a freelancer - he insists this is against the law.
We don't want to get into having the acocuntant advise as the shoestring is near breaking point.
Can we keep changing the ownership shares so it goes 80% to me, 20% to him, till we get to an income of 'x' and then it goes back to 50:50?
(with a sliding scale in between)
We're not looking for cunning tax avoidance deals and personally I prefer simple self employment versus dividends, but the business idea is essentially sound.
Any other ideas or simple solutions to this?
Many thanks for any input
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