Partnership and Company Shares

F

fixerone

Guest
Hi,

I recently joined forces with a ex work colleague to set up a business. We are currently working under his company. As he set it the company up a few years ago he owns 100% the company shares.

To make things fairer we want to split the company shares down the middle. Is there an easy way to do this ? (without me investing money for shares)

Can we just transfer shares between us ?

Thanks in advance.
 
You do need to get tax and company secretarial advice on this.

If he just had a dormant company of no value, then he can transfer the share to you at no cost.

However, if there were assets in the company, then he would be treated as making a disposal (which would be subject to CGT) and you would be treated as getting a gif (which would be subject to CAT)
 
I think the company does have a value.

For example

If the company had say 100,000 shares valued at 1 euro each. An he issued 10,000 of the shares as his initial invesment. He owns 100% of the company with his investment of 10,000.

Would he have to get me to invest the same to even up the share allocation ?
 
He will still have a disposal and cgt.

Just form a new company as it will be easier
 
The original owner is then giving away a portion of whatever his company balance sheet now stands at, unless there is an equivalent payment for the shares.
 
Gervan said:
The original owner is then giving away a portion of whatever his company balance sheet now stands at, unless there is an equivalent payment for the shares.
Click to expand...

When people issue shares to e.g. venture capital investors (even at less than "market" value) they don't have to pay capital gains. The minimum that has to be paid for the shares is par value.

So, OP, you would have to pay for the shares, or else e.g. work for the company and take part payment in shares. You'd need to make a different return to the CRO and also submit the contract under which you were getting the shares, which you may not want to do as it would be publicly available. You'd submit that with the B5 or, if there is no written contract, on a form 52 describing the basis on which you were granted shares. The key thing is that you'd be granted shares for non-cash consideration and you'd have to check the Articles to see that it's allowed.
 
You must log in or register to reply here.
Back
Top