T
trevstonbury
New Member
Good Morning,
I’m hoping to get some advice on the best setup for accounting and remuneration for a Ltd company that I am a partner in. I’m not expert in accounts so any advice in layman’s terms would be greatly appreciated!
Background
Proposed solution
Issues/queries
The current workload is probably split between the three of us as follows; 45% (me),40% (colleague 1),15% (colleague 2). I would want any remuneration to reflect this workload, though there will be some negotiation on roles to ensure the current workload could be more evenly distributed.
I have a friend who is a trainee accountant and he has advised me that in my situation and for tax purposes it would work best for me financially to take out dividends instead of a wage. He said it’s possible to set up different types of shares that doesn’t affect control/ownership of the businesses but does allow individuals to take out different dividend amounts, though he wasn’t an expert in this area. Can someone tell me if this would work or is there a limit on the dividends you can take in this way before it's not economically viable.?
Any help or advice would be much appreciated, if you need any other information please let me know!
Kind regards
Trevor
I’m hoping to get some advice on the best setup for accounting and remuneration for a Ltd company that I am a partner in. I’m not expert in accounts so any advice in layman’s terms would be greatly appreciated!
Background
- The company is split 3 ways between myself and 2 others each having a 3rd of the shares.
- One partner is a director in another company, which is unrelated to the industry our joint venture is in.
- One partner is self-employed as a consultant in the same industry
- I also am self-employed as a consultant in the same industry
- My business partners are also a couple (if this has any bearing)
- My business partners and I each have our own existing clients still separate from our Ltd company but all new clients from the date the company was formed come under the new company.
- I have an existing agreement that predates the formation of the new company. This is for a client of my business partner. Basically, I do some work for one of their clients and then invoice my business partner monthly, this makes up a fair portion of my monthly income.
Proposed solution
- My business partners have now proposed that we move all our clients, everything to our new company
- Setup PAYE and each take a monthly wage and then splits any profits via dividends
Issues/queries
The current workload is probably split between the three of us as follows; 45% (me),40% (colleague 1),15% (colleague 2). I would want any remuneration to reflect this workload, though there will be some negotiation on roles to ensure the current workload could be more evenly distributed.
I have a friend who is a trainee accountant and he has advised me that in my situation and for tax purposes it would work best for me financially to take out dividends instead of a wage. He said it’s possible to set up different types of shares that doesn’t affect control/ownership of the businesses but does allow individuals to take out different dividend amounts, though he wasn’t an expert in this area. Can someone tell me if this would work or is there a limit on the dividends you can take in this way before it's not economically viable.?
Any help or advice would be much appreciated, if you need any other information please let me know!
Kind regards
Trevor