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Ltd Company questions

Re: Ltd Company questions

Postby BoJangles » Mon Nov 14, 2016 10:34 am

Bear with me, I got really bad internet connections. CS used to contribute (work wise) until the new accountants took over. During the past 2 years, one staff member would seek advice from CS on occasions when D would ask staff member to deal with something. D was/is unaware of assistance to staff member. Is it this sort of contribution you mean or that of monetary value?
Note: I am not a lawyer...just learnt a fair bit on that hideous road called litigation
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Re: Ltd Company questions

Postby diy » Mon Nov 14, 2016 11:41 am

Without wishing to answer the question you asked another... There is value in attempting to understand what would happen if D & CS parted company.
Can the company continue to function without D? It doesn't sound like it.
Can the company function without CS? It sounds like CS has been outsourced to the accountants.

Therefore if D & CS cannot reconcile their differences CS is out and therefore the value of their contribution, money time and possible IP, along with their share of the company needs to be assessed. Atticus may mean something else, however.
My suggestions are not legal advice
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Re: Ltd Company questions

Postby atticus » Mon Nov 14, 2016 12:04 pm

Was there any financial contribution?
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Re: Ltd Company questions

Postby BoJangles » Thu Nov 17, 2016 11:08 am

Update: CS has spoken with one of the accountants. It would appear there is no DL. The reason there is no DL is because part of other 50% shareholder Dividend is transferred to D to cover D's overdrawn draws resulting in no DL. When queried how this money is repaid to other 50% shareholder and citing a bit of Companies Act, CS was told it was a personal matter, I am assuming Civil Courts, am I correct?
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Re: Ltd Company questions

Postby atticus » Thu Nov 17, 2016 1:34 pm

Yes.

You describe a common situation whereby drawings are debited to a loan and repaid through dividends declared at the year end. If dividends cannot be paid, the drawings are converted to salary.
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Re: Ltd Company questions

Postby BoJangles » Thu Nov 17, 2016 4:30 pm

Thanky spankies!

If company closes with debt in place, are the funds owed still retrievable through civil proceedings?
If company closes with debt in place, are funds owed still retrievable if D starts up new company?
If yes to either of the above, would the time limitation be 6 years?
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Re: Ltd Company questions

Postby atticus » Thu Nov 17, 2016 4:34 pm

The co (or its liquidator) can seek payment of debts owed to the company.
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Re: Ltd Company questions

Postby jantra » Mon Nov 21, 2016 4:15 pm

BoJangles wrote:Update: CS has spoken with one of the accountants. It would appear there is no DL. The reason there is no DL is because part of other 50% shareholder Dividend is transferred to D to cover D's overdrawn draws resulting in no DL. When queried how this money is repaid to other 50% shareholder and citing a bit of Companies Act, CS was told it was a personal matter, I am assuming Civil Courts, am I correct?


are the shares jointly held or owned separately? if they are owned separately then each shareholder is entitled to receive their dividend directly. The accountants may be doing what they think is correct to avoid s455 tax on overdrawn DLA's (charging the full divs against the DLA), and normally this would be fine, as you have transfer of assets between spouses at no gain or loss, however in this case one shareholder would like the divs paid directly.

write a letter (as a shareholder) to the company asking for clarification why the divs weren't paid to the shareholder directly.
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Re: Ltd Company questions

Postby BoJangles » Tue Nov 22, 2016 3:05 pm

jantra wrote:
BoJangles wrote:Update: CS has spoken with one of the accountants. It would appear there is no DL. The reason there is no DL is because part of other 50% shareholder Dividend is transferred to D to cover D's overdrawn draws resulting in no DL. When queried how this money is repaid to other 50% shareholder and citing a bit of Companies Act, CS was told it was a personal matter, I am assuming Civil Courts, am I correct?


are the shares jointly held or owned separately?


I am not sure. All I know is CS (50% shareholder) owns half the co according to accountants

jantra wrote:if they are owned separately then each shareholder is entitled to receive their dividend directly. The accountants may be doing what they think is correct to avoid s455 tax on overdrawn DLA's (charging the full divs against the DLA), and normally this would be fine, as you have transfer of assets between spouses at no gain or loss, however in this case one shareholder would like the divs paid directly.


Yep, that is what has been happening hence the arguments when CS's signature required. Accountant said after long discussion that the problem was, that they had been treating the account as one instead of two.

jantra wrote:write a letter (as a shareholder) to the company asking for clarification why the divs weren't paid to the shareholder directly.


Already been raised albeit not in writing, D just laughed
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Re: Ltd Company questions

Postby atticus » Tue Nov 22, 2016 3:19 pm

Writing is good. It creates a record.

And ask the accountants why they treated the two as one.
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