Thank you for all the important and helpful information. Q1: When buying back the Redeemable shares, how do you value them? Do you have to give them a new value according to the company's performance or is it going to be the same price as you sold them? Q2: Can the shareholder decide not to sell back the shares after the end of his contract period or is he/she obliged to sell them? Q3: When selling non-ordinary shares to gain capital, do you have to change/increase the current value of each share to gain more capital from fewer people? Imagine your company has 10,000 shares with the value of £1 for each share. Can you sell 100 shares for £10,000 (giving a new value for each share, in this case, £100 for each share) or do you have to increase the numbers of the share with the same value?
Thanks for getting in touch and delighted you found the information useful. Your questions are getting into specific professional advice which we can not provide unfortunately but in general terms 1. Redeemable price is usually at the same value as they were issued, but anything can be subject to agreement, and additional company law and tax issues arise if the value is higher. 2. Usually the redeemable date is fixed or at director discretion. Again anything can be agreed and perhaps there could be a mechanism to convert the redeemable into Ordinary Shares so that they do not get redeemed. Would need to understand the conversion values! 3. The nominal value of a share is fixed. This can be changed by company resolution. The issue price can be anything and is linked to the overall value of the company. Any value higher than the nominal value is "Share Premium" Hope that helps
hi guys how are you doing? your advice and tips are absolutely amazing, I have gone through a good few of your videos and was interested in knowing if at any point you guys would be interested in bringing on new business startup companies onto your channel to expand what it is your doing and share your knowledge with people who are less confident in the business. for example myself hahaha :D
Delighted your finding the videos helpful and enjoying them. Like your idea for guest businesses and we may come back to this at some point in the future in which case we’ll let you know for sure! Working on a few new videos just now too to stay tuned!
Thanks. So what to choose for a small family furniture (small items) home manufacturer (UK)? A hindered of ordinary shares, decided by 99 and 1 between the spouses to let the second spouse get tax deduction for the dividends (one one spouse will rule the company)? Please advise.
Hi Thanks for the question. Assuming the shares are the same class, ie standard Ordinary shares then it is possible for a non working spouse to hold shares and therefore receive income via dividends. As dividends are paid per share, the non working spouse would only be entitled to 1% of the dividends in this example. There are dividend waivers, different classes of shares and things, but you need to get proper advice if you want to distribute profits in ratios that are not in the share ownership.
Can you issue 10,000 startup share capital and allot part of the share capital and leave the balance unalloted on your balance sheet (equity Capital & Reserves section), perhaps in this form notes to the accounts breaking this down? The unalloted shares could be reserved and future proofing the company for new investors....
A good question and this is an area where the Company Law has changed. There is no longer a requirement to have an authorised share capital and so it is not really possible to have unalloted shares showing on the Balance Sheet. There are different rules where a company has more than one class of share, but these days, Directors usually have a general authority to allot shares without the need to obtain shareholder approval, unless the Articles of Association specifically restrict this. On that basis, future investors know that shares can be issued to them and so the future proofing you refer to is not necessary. It is perhaps more likely that investors will want to restrict the authority that allows Directors to issue more shares. Although not part of the Balance Sheet, you could provide additional disclosure in your accounts about shares that are expected to be issued. This is more usually seen with Option Pools, whereby the company may disclose that it has set aside X number of shares to be available for share options to key employees. This is then included in the Share Cap tables to inform investors of their fully diluted position within the company. Hope that helps.
Minimum age for a director of a Uk ltd company is 16. You can give children shares in a company but would definitely take professional advice if you plan to do this especially from a tax perspective.
Thank you for all the important and helpful information.
Q1: When buying back the Redeemable shares, how do you value them? Do you have to give them a new value according to the company's performance or is it going to be the same price as you sold them?
Q2: Can the shareholder decide not to sell back the shares after the end of his contract period or is he/she obliged to sell them?
Q3: When selling non-ordinary shares to gain capital, do you have to change/increase the current value of each share to gain more capital from fewer people? Imagine your company has 10,000 shares with the value of £1 for each share. Can you sell 100 shares for £10,000 (giving a new value for each share, in this case, £100 for each share) or do you have to increase the numbers of the share with the same value?
Thanks for getting in touch and delighted you found the information useful.
Your questions are getting into specific professional advice which we can not provide unfortunately but in general terms
1. Redeemable price is usually at the same value as they were issued, but anything can be subject to agreement, and additional company law and tax issues arise if the value is higher.
2. Usually the redeemable date is fixed or at director discretion. Again anything can be agreed and perhaps there could be a mechanism to convert the redeemable into Ordinary Shares so that they do not get redeemed. Would need to understand the conversion values!
3. The nominal value of a share is fixed. This can be changed by company resolution. The issue price can be anything and is linked to the overall value of the company. Any value higher than the nominal value is "Share Premium"
Hope that helps
@@basicsofbiz Thank you very much. I appreciate the time you spent answering my questions.
Wish all the best,
Thank you! This was seriously insightful.
No problem at all Elizabeth! Delighted you found it useful.
hi guys how are you doing? your advice and tips are absolutely amazing, I have gone through a good few of your videos and was interested in knowing if at any point you guys would be interested in bringing on new business startup companies onto your channel to expand what it is your doing and share your knowledge with people who are less confident in the business. for example myself hahaha :D
Delighted your finding the videos helpful and enjoying them. Like your idea for guest businesses and we may come back to this at some point in the future in which case we’ll let you know for sure! Working on a few new videos just now too to stay tuned!
Can you a video on frezee and growth shares pls
Thanks for the feedback and will add to the list for consideration for sure.
Thanks. So what to choose for a small family furniture (small items) home manufacturer (UK)? A hindered of ordinary shares, decided by 99 and 1 between the spouses to let the second spouse get tax deduction for the dividends (one one spouse will rule the company)? Please advise.
Hi Thanks for the question.
Assuming the shares are the same class, ie standard Ordinary shares then it is possible for a non working spouse to hold shares and therefore receive income via dividends. As dividends are paid per share, the non working spouse would only be entitled to 1% of the dividends in this example.
There are dividend waivers, different classes of shares and things, but you need to get proper advice if you want to distribute profits in ratios that are not in the share ownership.
Can you issue 10,000 startup share capital and allot part of the share capital and leave the balance unalloted on your balance sheet (equity Capital & Reserves section), perhaps in this form notes to the accounts breaking this down? The unalloted shares could be reserved and future proofing the company for new investors....
A good question and this is an area where the Company Law has changed. There is no longer a requirement to have an authorised share capital and so it is not really possible to have unalloted shares showing on the Balance Sheet. There are different rules where a company has more than one class of share, but these days, Directors usually have a general authority to allot shares without the need to obtain shareholder approval, unless the Articles of Association specifically restrict this.
On that basis, future investors know that shares can be issued to them and so the future proofing you refer to is not necessary. It is perhaps more likely that investors will want to restrict the authority that allows Directors to issue more shares.
Although not part of the Balance Sheet, you could provide additional disclosure in your accounts about shares that are expected to be issued. This is more usually seen with Option Pools, whereby the company may disclose that it has set aside X number of shares to be available for share options to key employees. This is then included in the Share Cap tables to inform investors of their fully diluted position within the company.
Hope that helps.
What is the minium age for being director of Ltd?
How can you put your minor children into Ltd?
Minimum age for a director of a Uk ltd company is 16. You can give children shares in a company but would definitely take professional advice if you plan to do this especially from a tax perspective.