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Husband wants my name as secretary for his new company(20 Posts)
I will try to be brief.
My husband has his own business of which I am a director (in name only) (have been so for the last three years or so) - i believe this to be for tax reasons. Dividends are paid into my bank periodically and this money is transferred in its entirety to my husbands bank as he deals totally with the household finances.
This company is still active.
He has now formed a new company - this time with an ex colleague. They want to register me with companies house as secretary of this new company.
I admit to be very naive about all of this - what legally could I be responsible for - and are what the pros and cons (for me personally) that I should consider before putting my signature on this form.
As an aside - but equally important - I should add that shortly prior to this new business being formed I found out about my husband having an affair. This relationship has ended and me and my husband are working things through.
I think the big questions on my lips here is what's in this for me if I sign - and actually do I want to/should I sign?
I have said that I want an active interest in the business other than typing up the odd document etc and have suggested I do the bookkeeping for them. I am not trained for this but can balance my own bank account and have had a budgeting role in a large parcels delivery company in a past job.
I suppose I could say that they pay for me to do bookkeeping exams etc and do the books.
But I am sure I am missing something important here.
Observations would be warmly welcomed here.
Thanks in advance.
Personally, I wouldn't do it. But then I am in the process of a divorce, so I can only see how this might have complicated my own situation.
Company Secretary is a formal role within the company like being a director, but without quite the same responsibility. There is some pretty good information out there - this is clear.
As secretary you wont be responsible for anything legally. Usually the respnsibilities involve updating the records held by Companies House, managing and storing the companys records and organising the companys meetings - bpard and agm. However depending on the size of the company you may not need to do all of the above, its usually a trusted named person with small companies. I was the company secretary for my dh business when he had his own and I had to go with him to the accountant once a year and sign some things, that was about it.
Hmmmmm - good for thought - how would it complicate things for me if "D"H and I eventually divorce, I wonder? Thanks for the input.
As a director you have rights and responsibilities you won't have as a secretary. In the other companies, the fact that you were just a "nominal' figure didn't matter because your ex, I assume, was the sole owner.
As there is another person involved with the new company, I expect the new company's other director won't be very pleased about putting down as a director if your contribution to the new company is not at least similar to that of all directors. This doesn't represent a problem.
Don't want to scare you off, but considering the affair (--and my own experience--), I would suggest to get a more active part in how the finances are organised at home, and...If at some point he asks you to stop being a director... I would be inclined to book a half an hour consultation with a family solicitor in a firm with a good financial/shares background, to find out what would my position be if he leaves.
Atthendof : thanks for that very sound advice. I do have a solicitor who I contacted at time of affair revelation to find out what my position is prior to me confronting husband. Husband doesn't know that I have sought legal advice - I didn't see the need for him to know at the time.
I do recOgnise that it's still early days with us as affair discovery was July. And so obviously things are still raw and egg-shell'ish iykwim
He has asked me a couple of times to sign now and I've put it off saying yes I will do but not right now.
I suppose now is the time for me to say that I will talk to my solicitor first to understand my position fully b4 signing. (and let him know that, yes, I have a solicitor :-)).
Companies no longer need a Company Secretary so I cannot see any reason why you should do this.
A company secretary does not have to be a director. No reason why the other person involved with the company should be upset with you being company secretary regardless of your level of input.
A company secretary has no formal powers and the law doesn't really define the role. Indeed, private companies don't have to have one at all unless their articles of association specify that they must. Typically the company secretary in a small business where the shareholders are the directors will keep the statutory registers, make sure returns are sent to Companies House as required, make sure the company records can be inspected by anyone entitled to do so and keep the company seal (if there is one). So it isn't a terribly demanding role. However, as an officer of the company the secretary can be liable if the company commits an offence. If you take the role you should encourage the directors to put in place Directors and Officers Liability insurance to protect themselve and you.
The situation with the other company is more serious. If you are a director of this company (i.e. you are registered at companies house as a director) then you have a DUTY to concern yourself with the affairs of the company; if the company acts illegally directors may in certain circumstances be held personally liable.
There is no such thing as being a director "in name only". As MrAnchovy says, being a company director carries duties and obligations that, if the company is being run badly or worse, fraudulently, could have serious negative consequences for you personally. You are under a fiduciary duty to the company to ensure the business is being run in the interests of the shareholders. If you have no idea what is going on, it's time you found out.
So ...... in the circumstances the best thing would be for me to resign as director (remain shareholder only)? Or just resign totally and be disassociated immediately?
In relation to new company - just not be involved at all?
Understandably at the moment I have trust issues with DH - so until such time (if at all) he regains my trust there's really no point getting involved. ???
If you retire as a director you can remain a shareholder. Shareholders are not bound by the duties directors are under. But I would be very wary about being a director of any company of which I did not know the day-to-day dealings and finances.
No, don't tell him you have seen a solicitor yet, that would set the wolf among the chickens.. Just ask him more about why do the need to name you as a secretary of you are not going to be involved.
He's explained the company secretary appointment as a way of me paying/uppity my NI (which having been SAHM for the past 6 years I haven't paid into obviously)
Do you not already receive a directors fee from the other directorship? To get full credit for the basic state pension in 2012/13 you need to earn at least £5,600 (and for maximum tax efficiency it is usually best to earn just under £7,500) in one employment. If you don't have any one employment that earns more than this you get no benefit, and there is no material additional benefit from any other earnings in that or any other job (only SERPS if that is worth anything, marginally more Maternity Allowance in some cases etc.)
If you are employed as company secretary on a salary of £7,500 but don't really do anything HMRC can easily challenge this because what you are doing is not worth £7,500 to the company. It is much harder for them to challenge a director's fee of £7,500 because it is difficult to put a value on the burden of responsibility.
Google "income shifting" for more information, but you really need professional advice looking at all of these arrangements. Normally this works on the basis that the business and family finances are a like a flotilla of ships sailing in the same direction: the aim is to distribute the cargo most efficiently so that the flotilla makes its best speed towards the destination. However if the crew of one ship mutinies and heads off in another direction not only are the arrangements no longer optimal, some of the cargo may be lost.
Thanks - everyone - for your advice.
I'm waiting until he brings up the subject again - note that he has filled in the form and all that is missing is my signature and it is back on the top of his to do pile.
When he does I am going to quote (if that is ok with you MrAnchovy?) some of the things you mention - and query how the new company proposes to ensure they and me are protected - clearly just appointing me as secretary and then just saying all I need to do is delegate to the accountant is not enough.
The other thing that I will mention in relation to both companies is that they need to minute all these appointments and changes and will ask to see the minutes (in the case of old company) appointing me as director/shareholder.
I'm still not convinced I want to be involved - the only way MAY be for me to do a course and undertake the responsibilities in a formal role.
But then of course I do realise that this is my name and I am at absolute liberty to say that I don't want to be involved without the need to justify that.
Am I missing anything else here?
The National Insurance thing might be a bit of a red herring. You may be entitled to NI Credits anyway. See here.
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