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Two contractors - One LTD ??

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    Two contractors - One LTD ??

    Hi everyone

    Just a quickie - has a search back through posts but can’t find an answer, forgive me if I’ve missed it though.

    Both hubby and I are contractors (different clients) and we want to set up as LTD. I’m wondering if it’s okay and wise to set up one LTD company with us both as 50% shareholders rather than 2 separate ones (for ease more than anything ). Can anyone advise please ??

    Thank you
    Madge

    #2
    Originally posted by Madge67 View Post
    Hi everyone

    Just a quickie - has a search back through posts but can’t find an answer, forgive me if I’ve missed it though.

    Both hubby and I are contractors (different clients) and we want to set up as LTD. I’m wondering if it’s okay and wise to set up one LTD company with us both as 50% shareholders rather than 2 separate ones (for ease more than anything ). Can anyone advise please ??

    Thank you
    Madge
    You are aware that things will change from April when the new IR35 rules kick in and that from then using a limited company will be the exception rather than the rule

    Beyond that some agents will insist on single directors which could be a problem

    I would personally have a separate limited company each.
    merely at clientco for the entertainment

    Comment


      #3
      Two contractors - One LTD ??

      I’d go the opposite way to eek.

      If you are sure of continuity of business post April then I’d do the one LTD. with you both as directors and equal owners.

      Talk to an accountant though. And understand the responsibilities of being a director.

      I’ve never had an agent insist on a single director. Doesn’t mean it’s never happened mind but not in my experience.
      My wife is a director of my LTD purely in case I drop dead. The accountant advised it as the simplest way for her to be close it down.
      Last edited by Lance; 24 January 2021, 13:46.
      See You Next Tuesday

      Comment


        #4
        Originally posted by Lance View Post
        I’d go the opposite way to eek.

        If you are sure of continuity of business post April then I’d do the one LTD. with you both as directors and equal owners.

        Talk to an accountant though. And understand the responsibilities of being a director.
        Were it not for agents often being awkward and stupid I would have suggested the same but I've had difficulty with agents in the past over the fact Mrs Eek is a director and 50% share holder.

        And you don't want to lose a 6 month £50k contract for want of a stupid agent.
        merely at clientco for the entertainment

        Comment


          #5
          Originally posted by Madge67 View Post
          Both hubby and I are contractors (different clients)
          If hubby is likely to bill a lot more than you i would go for one company.
          If you are likely to be the main biller then one each

          Comment


            #6
            I'd go one each for the reasons that Eek mentioned as I've also had contracts stipulating shareholding .It's also just a lot cleaner for when one gets and inside and the other gets an outside further down the line as well.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              There are pros and cons to sharing a company and its well worth talking it though with an accountant. If there is potential for one of you to earn significantly more than the other then you need to have a frank discussion between you about how you want to arrange your finances. An accountant will tell you the options around different share classes, salary vs dividend etc. etc. but there's also how you both feel about money and earning power to consider. How would you feel if hubby took 6 months off but kept drawing salary and dividends out of what are essentially your earnings?

              Hate to say it but, if you were to split up, a shared company could be a bit of a curse too.

              Comment


                #8
                Think forward of when you quit contracting and want to close the companies. If BADR remains in force then you would be better off have 2 companies so that you could gain BADR on both at some point. You and Mrs probably won't be able to have a 50/50 share of each company though - but best to discuss with a tax specialist.

                Also on the other hand don't solely plan for something i.e. BADR, that might not be around in 10 years time (or however long you intend to contract).

                Comment


                  #9
                  Originally posted by Fraidycat View Post
                  If hubby is likely to bill a lot more than you i would go for one company.
                  If you are likely to be the main biller then one each
                  You're thinking of marriages, not limited companies

                  In all seriousness, though, while there is the obvious cost saving, there is the issue of having the controlling interest as some contracts stipulate.
                  Your accountant or lawyer may have better advice (I'd hope they would!)
                  The greatest trick the devil ever pulled was convincing the world that he didn't exist

                  Comment


                    #10
                    Originally posted by northernladuk View Post
                    I'd go one each for the reasons that Eek mentioned as I've also had contracts stipulating shareholding .It's also just a lot cleaner for when one gets and inside and the other gets an outside further down the line as well.
                    +1 - dividend payments would be a nightmare if one is inside earning £70,000 while the other is outside and wishes to pay themselves £40,000 in dividends.
                    merely at clientco for the entertainment

                    Comment

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