Director of husbands company

[CBradshaw]

Husband and I have just separated - he has his own limited company of which I am a director/shareholder. I don't want to receive dividends any more as it will affect my universal credit. Should I remove myself as a director and/or shareholder? Will this affect anything I may be entitled to from the business when we divorce? (The business isn't worth much but has a steady turnover).

[Magazine201]

Don't remove your self for the sake of your kids

[Zerrin13]

Stay on the directorship. Use it as a bargaining tool if you divorce.

[NotBeingRobbed]

“I don't want to receive dividends any more as it will affect my universal credit.”

Benefits are for people who don’t have other income, or who have low income. As far as I can see the main purpose of the divorce courts is to try to minimise the welfare bill for other taxpayers. I can’t see why you should just resign then claim benefits.

[Xenia]

YOu are conflating director and shareholder. You can be a director without being a shareholder and vice versa. If you resign as a director you are still a shareholder and will still get dividends. If you resign as a director you lose power. If you give up shares you lose the dividends. also why sould the rest of us tax payers keep you when the company could be pauying you dividends? It just sems unfair to fall back on the stretched state when there is no need. Could you not get a full time job to help ensure you make no claim on state funds?

[CBradshaw]

I do currently work, but need some benefits to help me afford the house for me and my 2 young children. I wasn't working when he started the company so splitting the company (and dividends) between the 2 of us made sense at he time.

Whenever I have received dividends whilst with my husband, the money was given straight back to him (to pay bill's etc). This worked out ok before I recently started work again.

My husband is already paying me maintenance for the children so he would want any dividends paid to me to be given back to him (as effectively it was used as part of his monthly take home)

I don't actually want any dividends paid to me any more but want to still be aware of the company's money until we divorce.

Should I resign as a shareholder? Or would it be easier to just resign as both shareholder and director?

[AdoreTheBeach]

Just to clarify, you can resign as a director. It’s as simple as signing a firm and delivering to companies house. As for shares, it’s a share transfer, usually for consideration (ie, money or something of value), unless you were holding the shares on trust for another. There can be tax implications for transferring shares (as well as receiving dividends).

This is something you should discuss with your solicitor as part of your financial settlement.

[ScreamScreamIceCream]

My advice would be to stay as a director until your divorce is finalised so you have legal oversight of how much money is in the business.

If you think being a shareholder is causing you financial issues then ask him to buy the shares of you. However the dividends from those shares are your income alone, and shouldn't be used by him to pay bills and maintenance.

Beware if you resign as a director and/or shareholder you have no legal reason to see how much is in the business. He can then screw you over financially. You want to agree with him as part of the financial settlement he buys your shares off you and you resign your directorship.

[Abcdefg1234567abcdefg]

Hi @CBradshaw . I'd really like to know what you did about being director and receiving UC please? I am literally in the exact same position now! Whenever I recieved dividends, I always gave them straight back to my husband. I never kept a penny. I have 2/6 of the shares and am 1 of 3 directors.
My husband and I have separated so I started to claim UC. He wants to use my tax code for last financial year but I've discovered that I could get into trouble with UC if I do this. What did you do in the end? How did it impact you in divorce and with UC?

Thanks

[CBradshaw]

I can't remember all the details, but in the end I took a small lump sum (about £1500) and resigned as a director. I didn't want to receive money from the business which I had to pass back to him. To UC it would look like I was earning money when I wasn't.
Also the company wasn't really worth anything - it was just my exes way to get paid.

It meant there was one less thing to sort when it came to the divorce and finances. We just discounted his limited company from the sums.

Good luck, hope you get it sorted.

[Abcdefg1234567abcdefg]

@CBradshaw thank you so much for responding. It's so helpful to hear how you solved it and I'm pleased to hear that it worked out in the end for you.
It often feels like it's a never ending battle so thank you for sharing your update.