Brother as sole director of ltd Brother as sole director of ltd
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  1. #1

    Nervous Newbie

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    Default Brother as sole director of ltd

    Hi.

    I'm now to these forums and contracting in general, so maybe a stupid question coming up as I've got a lot to learn...

    I'm currently a perm, but I'm interested in going contracting. Are there any issues with setting a ltd company with my brother as the director and owner, and me as an employee? We are very close and I'm confident there would be no issues between us, but wondered if anyone had any experience or advice on this?

    The reason for this is I'm in a difficult marriage, divorce is a possibility in the next couple of years and whilst I will always support my kids, my wife would try to take me to the cleaners for everything I've got - so looking for ways to protect myself and preserve the right to some kind of modest life after splitting up!

    Thanks

  2. #2

    Prof Cunning @ Oxford Uni

    WTFH is always on top

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    Hi BF, welcome.

    My advice? Stick to the permanent job until you get your marriage sorted out. Contracting is a lifestyle choice and it puts strains on both the contractor and their relationships.
    If you are dead set on being a contractor and dead set on getting divorced, I would suggest getting the divorce sorted first, once that is finalised then stay in your perm job for another 6 months or so, while preparing for contracting.

    ...and none of that advice is about the money, how you set up your ltd, or anything like that.

    If you want advice purely around the financial aspect...
    1. Don't set up an ltd with a family member where they own the company and you are the employee who does all the work. It will get messy.
    2. Don't try to hide funds from a divorce lawyer - if they get a sniff that you're hiding something then your brother's finances could get brought in to the settlement.
    3. Don't try to find a convoluted way to pay less tax by paying family members then getting them to pay you. HMRC are a bit like divorce lawyers.
    Strong and Stable Moderation

  3. #3

    My post count is Majestic

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    Can your brother bleed radiators?
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  4. #4

    Contractor Among Contractors

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    The obvious things to be careful about

    1 What happens if your brother dies in a car crash one day, who inherits the money in the company? tax implication for any such inheritance?
    2 Your brother gets married/divorced or unexpected child turns up with a mother demanding maintenance... what happens to the money?
    3 Your brother gets arrested for some serious crime?
    4 Somebody sues your brother for something, and the court ends up taking account of all his assets including this company?

    These are reasons people dont bother with this approach

  5. #5

    Banned

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    Quote Originally Posted by northernladuk View Post
    Can your brother bleed radiators?
    How helpful

  6. #6

    Double Godlike!

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    Quote Originally Posted by CoolCat View Post
    ...

    These are reasons people dont bother with this approach
    The main one being the issue of Shadow Directors... Look it up.
    Blog? What blog...?

  7. #7

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    Quote Originally Posted by Bf1974 View Post
    Hi.

    I'm now to these forums and contracting in general, so maybe a stupid question coming up as I've got a lot to learn...

    I'm currently a perm, but I'm interested in going contracting. Are there any issues with setting a ltd company with my brother as the director and owner, and me as an employee? We are very close and I'm confident there would be no issues between us, but wondered if anyone had any experience or advice on this?

    The reason for this is I'm in a difficult marriage, divorce is a possibility in the next couple of years and whilst I will always support my kids, my wife would try to take me to the cleaners for everything I've got - so looking for ways to protect myself and preserve the right to some kind of modest life after splitting up!

    Thanks
    Hi BF1974, sorry to hear about your marital woes.

    As WTFH says, get these issues sorted out before you even think about going contracting. The lifestyle has plenty of stresses of its own and these, coupled with the extreme stresses of a difficult divorce would just be too much in my opinion.

  8. #8

    I live on CUK

    SueEllen is a fount of knowledge

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    Quote Originally Posted by The Castle Cary Fairy View Post
    How helpful
    If you ask serious questions in general rather than the right forum - in this case accounting/legal - then you get stupid replies.
    "You’re just a bad memory who doesn’t know when to go away" JR

  9. #9

    Should post faster

    TonyF is too good to be a permie

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    If you are seen to be running the company anyway through a sham arrangement with your brother, it's not going to make much difference to hiding your money from the wife.

  10. #10

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    Quote Originally Posted by The Castle Cary Fairy View Post
    How helpful
    Says the tedious sockie.
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