Company secretary and setting up a pension

[eltoro]

Hi guys im new to contracting and i have 2 questions

1. is it legal to make my partner my company secretary a pay a dividend (my ltd doesn't currently have a secretary, just a director, me :>)

2. What the best way of dealing with pensions.

any advice on the above would be great

[Robert Pearce]

You can appoint your partner if you want to but companies formed under Companies Act 2006 aren't required to have a company secretary. The Articles of Association of your company will tell you how dividends can be declared. A director is usually able to declare interim dividends so, as long as you are happy that the company has sufficient profits, you just need to complete a board minute and dividend voucher.

[northernladuk]

Best answer to both of these, and I know it winds people up, but is to get an accountant for advice. It is legal to appoint a secretary and pay dividends in theory but if you get it wrong it will cost you big time.

Pensions is pretty straight forward and you save on corp tax so worth doing if you have other investments as well IMO...

But an accountant can save you cash if he does it right for you so go for that.

[Fred Bloggs]

Your partner does not need to be Co Sec. Make him/her a shareholder and pay him/her dividends.

[Jeremiah@RHJAccountants]

Your partner can become a company secretary and pick up a small wage. although as already said above companies under compaines act 2006 are not required to have a company secretary.

On making her a director and the pension my advice is speak to your accountant or find one. As these are really issues that an accountant can deal with as they will know your circumstances if you have one.

[Wanderer]

Your partner does not need to be Co Sec. Make him/her a shareholder and pay him/her dividends.

Yeah, what Fred said. Lots of people do this. Depending on how much your company profits are and if your partner is earning money you may want to go for an uneven split of the shareholding.

If you do it yourself and make a mess of it then you could end up paying thousands of pounds in tax you could have avoided. It's not especially complicated but it's vital to get proper advice from an accountant who can look at all your personal circumstances, incomes, projected company profit etc and advise on the best way to do it.

Make sure the accountant does all the sums for you and shows you a worked example estimate of how much tax you and your partner would pay and what the affect of partner earning other income would be etc.

And I presume that you understand the implications of IR35...

[eltoro]

Thanks for your help people!

I will speak to the accountant about making my partner a director

Thanks again

[Sockpuppet]

Thanks for your help people!

I will speak to the accountant about making my partner a director

Thanks again

I don't think you've understood properly. Being a secretary/director doesn't enable you to take dividends. Being a shareholder does. You can be a shareholder and not a director/secretary and you can be a director/secretary and not a shareholder.

If you take dividends to non shareholders then your doing it wrong.

[Barrow boy]

Dividends/Pensions

I don't think you've understood properly. Being a secretary/director doesn't enable you to take dividends. Being a shareholder does. You can be a shareholder and not a director/secretary and you can be a director/secretary and not a shareholder.

If you take dividends to non shareholders then your doing it wrong.

WHS! Speak to your accountant as some tax planning maybe needed around the shares and dividends. As for pensions, maybe worthwhile but again depends on circumstances but if going down that road speak to an IFA on which scheme rather than the usual High Street suspects so that you get what should be better deal on the market than the view of a non-independant bank.

[Rabotnik]

I initially made my other half company secretary so I could pay her a basic wage, but was advised by my accountant that I shouldn't do this since HMRC know that the position does not entail enough work to warrant a wage, so I had to get her resigned from the position immediately after forming the company.