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Where Taxpayers and Advisers Meet

Contractor Company Alphabet shares

Cap_Scarlet
Posts:32
Joined:Sun Jun 17, 2018 2:59 pm
Contractor Company Alphabet shares

Postby Cap_Scarlet » Wed Feb 13, 2019 1:44 pm

We currently own a newly (last year) established company in which my wife and I are both directors and equal shareholders (1 share each).

I want to waive my right to dividends and understand the best way to do that is via issue of alphabet shares which should have the same rights as the existing ordinary shares.

Question: I am aware of the Arctic Systems case and wanted to understand whether there are any guidelines on how many shares to issue? i.e. assume I issue the company issues an additional 10 'alphabet' shares to my wife meaning she becomes a 92% shareholder (her existing 1 plus the ten new shares meaning she holds 11 out of 12 shares) is that likely to cause any issues (e.g. with settlements legislation). Or indeed could I issue her with 98 shares?

Have a meeting with my accountant next week but wanted to get some thoughts in advance.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Contractor Company Alphabet shares

Postby pawncob » Thu Feb 14, 2019 5:56 pm

There's no point to alphabet shares if they rank pari passu with other shares in issue. They're only useful where they have rights which differ from ordinary shares.
With a pinch of salt take what I say, but don't exceed your RDA


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