Afternoon All,
Before I delve into my rather complicated question, I think a brief history would help set the scene. Back in 2013 I decided I want to start building up a company that would offer various 'Managed Hosted Solutions' to customers. This was setup as a LTD, with a 50/50 share structure between myself and my business partner. It was decided that I would go into Contracting to build up the relevant capital and pay myself with a mix of salary/dividends (although no where near to the 75% or so take home some people are able to get). Whenever I received a dividend, my business partner waived his right to his own. These have been marked as part of the directors meetings.
We are now at a point when we have the relevant capital to start the original business idea. Due to timings and other circumstances, I have decided to keep contracting by seperating the two business units into two different LTDs. We have decided to pay each other a dividend (50% each of the required capital) and start a new business. This way, I get to keep hold of other reserves in the contracting business and have the accounts for year one (which helps
)
Everything within that makes sense. I have asked my business partner if he can carry on doing the accounts for my contracting and he has talked about implementing an Alphabet share structure. This is where I get confused. I wondered if you lovely people could please shed some light on the setup, and anything we both need to be aware off?
The suggestion is to create a B class share which is worth 5%, and a fixed dividend paid per month (as long as profits are met). What does this actually mean from an ownership/capital point of view?
1) If I was to fold the contracting business (if the new business takes off), would he be entitled to 5% of whatever is left within the business?
2) If I were to sell on the contracting side (unlikely I know), but would there be a different price for the B class shares?
3) Is there anything else we should be aware off?
Thanks in advance,
Paul
Before I delve into my rather complicated question, I think a brief history would help set the scene. Back in 2013 I decided I want to start building up a company that would offer various 'Managed Hosted Solutions' to customers. This was setup as a LTD, with a 50/50 share structure between myself and my business partner. It was decided that I would go into Contracting to build up the relevant capital and pay myself with a mix of salary/dividends (although no where near to the 75% or so take home some people are able to get). Whenever I received a dividend, my business partner waived his right to his own. These have been marked as part of the directors meetings.
We are now at a point when we have the relevant capital to start the original business idea. Due to timings and other circumstances, I have decided to keep contracting by seperating the two business units into two different LTDs. We have decided to pay each other a dividend (50% each of the required capital) and start a new business. This way, I get to keep hold of other reserves in the contracting business and have the accounts for year one (which helps
)Everything within that makes sense. I have asked my business partner if he can carry on doing the accounts for my contracting and he has talked about implementing an Alphabet share structure. This is where I get confused. I wondered if you lovely people could please shed some light on the setup, and anything we both need to be aware off?
The suggestion is to create a B class share which is worth 5%, and a fixed dividend paid per month (as long as profits are met). What does this actually mean from an ownership/capital point of view?
1) If I was to fold the contracting business (if the new business takes off), would he be entitled to 5% of whatever is left within the business?
2) If I were to sell on the contracting side (unlikely I know), but would there be a different price for the B class shares?
3) Is there anything else we should be aware off?
Thanks in advance,
Paul
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