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Original poster

Is there anything dodgy about my DB asking me to be a secretary for his company?

37 replies

Barh · 26/08/2018 20:28

My brother is setting up a ltd for his locum work he does as a healthcare professional.

He has asked me if he can put me down as a secretary. I said no as I am not the secretary for his company and I don't understand what it means to be one.

He says it's just there as a thing and I don't need to do anything .

He has form for doing dodgy stuff and wondered if this was what it was about? He won't answer me clearly which is why I am suspicious. when I ask him and days it doesn't affect me in any way do doesn't understand why I have a problem with it. Are there any tax reliefs for him to have a secretary or anything like that?

OP posts:
Ta1kinpeace · 26/08/2018 20:32

He does not need one,
but you need to ask why he wants one
with new tariffs a mystery we have to assume price rises

Original poster
Barh · 26/08/2018 20:38

I have! But he's just avoiding it! Keeps saying you don't need to do anything, what's your problem, are you ok with it or not?

OP posts:
Ta1kinpeace · 26/08/2018 20:41

If he will not tell you why he needs a Company Secretary
when Company law does not require it
then refuse

witchmountain · 26/08/2018 20:43

Not sure what that link was meant to be but I agree, there is no requirement for one, so don’t go anywhere near it!

purplecorkheart · 26/08/2018 20:45

I would not. Clearly you do not trust him 100%. Do not bring the stress and worry into your life. I am not very up to date with company law but this does not sound right to me.

LifeHackQueens · 26/08/2018 20:56

It's a tax dodge. He should be paying you a salary and declaring it to the tax department. It will reflect on you as earnings which matters if you are claiming benefits. You will technically be employed.

Ta1kinpeace · 26/08/2018 20:57

He should be paying you a salary and declaring it to the tax department. It will reflect on you as earnings which matters if you are claiming benefits. You will technically be employed.
Utterly untrue

there is no requirement for a company secretary to be remunerated
the Company Secretary is NOT necessarily an employee

Viola82 · 26/08/2018 21:09

google: tax, secretary, ltd
very popular solution

MotherOfMinions · 26/08/2018 21:15

You have responsibilities and can be held liable and fined if the company does not heed its legal responsibilities. It is not something to be undertaken lightly or with someone you do not trust 100%

ArnoldBee · 26/08/2018 21:19

Ok so this comes up.on Google- may or may not be legally correct but it's all I would need to know...company secretary'srole in liquidation. ... Acompany secretary can held accountablefor any breaches of theCompaniesAct, and in the same way as directors, may be held personallyliablefor financial losses incurred by thecompanyor its creditors due to negligence.

TigerDragonMonkey · 26/08/2018 21:20

I’m company secretary for my DHs company. I’m on the payroll but don’t get a salary, I have no responsibilities or hours. I am legally liable though so don’t do it if you don’t trust him! But it is legit to have a company secretary that doesn’t actually do any work.

HollowTalk · 26/08/2018 21:27

I think it's a tax dodge. I wouldn't have anything to do with it unless/until you know exactly what's going on.

And I'd check he hadn't done it, too. He might do it without your permission. You can check at Companies House.

JennyHolzersGhost · 26/08/2018 21:28

If he has form for dodgy stuff then I wouldn’t get involved in a company with him whatever he wanted your role to be.
Don’t touch it with a barge pole.

Ta1kinpeace · 26/08/2018 21:29

It is NOT a tax dodge
its a responsibilty dodge
and it is worth checking yourself regularly on here
beta.companieshouse.gov.uk/
to make sure nobody has used your ID

PattiStanger · 26/08/2018 21:35

How is it a tax dodge - please explain?

HollowTalk · 26/08/2018 21:35

I didn't mean it was always a tax dodge, @Ta1kinpeace, just that it sounded that's what the guy wanted to use it for.

Ta1kinpeace · 26/08/2018 21:40

Hollow
Having a company secretary is NOT a tax dodge
it used to be the requirement

Original poster
Barh · 26/08/2018 22:45

Ok thanks for your replies. I think I will definitely be saying no! I had no idea i would be liable. I will be checking online on the companies website for my name too so thanks for that.

If you don't need one there definitely would be a reason for having me on their then. But it looks like there is no tax dodge if you guys are saying that's not how it can be done.

OP posts:
AndreasFault · 26/08/2018 22:52

IIRC the Company Secretary is more liable and therefore more likely to go to jail than the Company Directors if the company did bad stuff. Is he asking you to be a Company Secretary though? Or just a secretary to make his business sound bigger and better?

Logistria · 26/08/2018 22:55

You have responsibilities and can be held liable and fined if the company does not heed its legal responsibilities. It is not something to be undertaken lightly or with someone you do not trust 100%

In a nutshell, this. It has absolutely nothing to do with tax.

Although there are plenty of "dodgy" tax things people do with limited companies, having a CoSec isn't one of them.

Whitegrenache · 26/08/2018 23:10

Not a dodge..legitimate thing and I believe it's so they can draw more dividends from the company. We discussed this with our accountant when we we discussed my DPs business going limited

MaisyPops · 26/08/2018 23:16

Check where liability falls.

I'm no expert but I know of people who were talked into being secretaries for community clubs/groups on the books. It was sold as a bit of extra admin to help run the club but when shit hit the fan it was the people listed on the company accounts etc who were personally liable.
It's also something I think you have to declare on mortgage applications too (there was a question about links to companies). I would imagine that's because if you are personally liable in the company then your home is fair game should funds be needed.

But check with an expert. That's all anecdote.

Original poster
Barh · 26/08/2018 23:24

Whitegrenache what does drawing out dividends involve? Is that how he would pay himself? Would he be drawing out dividends on my name if co sec?

OP posts:
witchmountain · 27/08/2018 02:48

Barh Assuming he has set up a limited company to minimise his tax then he would probably pay himself a salary up to the max of the basic rate tax-payer band and then pay himself further money in dividends, which attract a lower rate of tax than being a higher rate tax payer.

Dividends are only be paid to shareholders. Having you as a company secretary wouldn't make any difference to that (a secretary is not automatically a shareholder).

It would be legitimate to appoint other shareholders and pay them dividends, which is possible]y what Whitegrenache has in mind - if you were a couple then you can see how that might be advantageous (because if over a certain amount of dividends are paid to one person and they will pay more tax, like with income tax, so it's beneficial to spread them between partners).

It would also be legitimate to pay a salary to a secretary.

So either he has failed to read even the most basic guidance and doesn't realise that for the last ten years it hasn't been necessary to appoint one. Or he wants to dishonestly foist some responsibility onto you. Or he thinks he can fake paying you a salary or dividends and keep the money for himself and for some reason thinks that having you as Company Secretary will facilitate that.

There is literally no good reason for him to be asking, don't let him pressurise you into it.