How to link to another company?

[scooby]

So, I've been invited to join another company as a director type role providing virtual services, but working on a dividend type payment way. I.e. they want PM and business consultancy to enable them to become services focused and respond to tenders and grow, but dont want to pay a day rate. They are also not an IT

What is the best way to do this? Is it to just become a director and shareholder of their company, or should I contract it via my company, but how do you do this without writing in charges? Would being a director in another company help any with IR35 (assuming that the relevant additional contracts are IR35 safe) contracts and the PSC tulip?

[northernladuk]

IR35 is on a role by role basis and how you are perceived in that role so no being a director of two companies doesn't make a difference really.

So you are going to be come an active director of a company taking on the risks and rewards or are you just supplying services to company that doesn't have cash to pay you? It starts out saying first but seems to end saying the latter?

[scooby]

So you are going to be come an active director of a company taking on the risks and rewards or are you just supplying services to company that doesn't have cash to pay you? It starts out saying first but seems to end saying the latter?

Fairly much, but i believe they can grow (due to me helping with tenders and such) so I should see a return in divi's...

[northernladuk]

Fairly much, but i believe they can grow (due to me helping with tenders and such) so I should see a return in divi's...

There were two options to my question. Which one does fairly much apply to?

[topper]

There were two options to my question. Which one does fairly much apply to?

Contracting to them sounds easier and least risky but do they have the working capital to pay you?!?! plus you don't see any of the rewards should they grow as you anticipate.

You could invest via your Ltd Co but that just seems pointless and not financially economical.

Do you trust your fellow directors and\or have appropriate agreements in place, with roles\responsibilities. If so then it's a no brainer for me, go for it.

[scooby]

There were two options to my question. Which one does fairly much apply to?

Fairly much starts off saying one thing, then moves to the other... They cant afford a day rate at the min, but need some help to expand.

Contracting to them sounds easier and least risky but do they have the working capital to pay you?!?! plus you don't see any of the rewards should they grow as you anticipate.

You could invest via your Ltd Co but that just seems pointless and not financially economical.

Do you trust your fellow directors and\or have appropriate agreements in place, with roles\responsibilities. If so then it's a no brainer for me, go for it.

Long story short, yes, it would be agreed and I do trust them. It would be agreed time, with agreed scope.

This could turn out to be a nice plan B actually... Although shareholding would be low (10%ish) but think I reckon I could agree more shares on successful delivery, therefore providing me a better income when my consultancy stops. Got to be worth a gamble, but its how to do it. I think its not worth doing anything through my company, and I should just do it through theirs... its not costing me any cash is it!! Worth a punt at least.

[Wanderer]

Although shareholding would be low (10%ish) but think I reckon I could agree more shares on successful delivery, therefore providing me a better income when my consultancy stops. Got to be worth a gamble, but its how to do it. I think its not worth doing anything through my company, and I should just do it through theirs... its not costing me any cash is it!! Worth a punt at least.

Will everyone have the same class of shares? What if the directors decide not to declare a dividend for your class of share or no dividend at all? What if you want to sell your share of the business, will it have any value? If you are a director then would you have voting rights?

You've really got to get some professional advice on this one, it's a potential minefield for everyone involved....

[scooby]

Will everyone have the same class of shares? What if the directors decide not to declare a dividend for your class of share or no dividend at all? What if you want to sell your share of the business, will it have any value? If you are a director then would you have voting rights?

You've really got to get some professional advice on this one, it's a potential minefield for everyone involved....

V good questions!! Time to think about this realistically.

[contractoralan]

Other options ...

a) If you can identify a deliverable (say, prepare and submit a tender), then you can negotiate a charge for the deliverable. Doesn't have to be priced on time, necessarily.

b) Take a cut of the monetary value you deliver. If you help them win a project worth 1 m, you can charge them x%.

c) it can be a combination of the above.


Good luck.