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Original poster

Can my husband fire me as a director of his company?

61 replies

Clicketyclack · 09/11/2015 22:35

My husband set up a company yrs ago with myself as a director and employee also.I know nothing much about it all except that (a) he contracts himself out for work in IT (B) he pays me a mediocre salary out of it (c) we are currently thinking of separating and I have accidentally discovered he is planning on sacking me as a company director/employee and starting a company pension for himself.
What does all this mean can anyone tell me and is it ok for him to do this?
Thanks in advance if anyone replies Thanks

OP posts:
wowfudge · 10/11/2015 19:44

OP the company's filed records - from incorporation documents to annual accounts and annual returns are in the public domain and anyone with access to the Internet can access them for free via the Companies House Beta Service - don't waste your time gathering documents like that or trying to get copies of them as there is no need.

Im0gen · 10/11/2015 19:46

You don't need to get payslips for it to be legit. And if she only gets dividends she won't be paying NI, only tax . You don't know how her allowance is made up . But the accountant can tell her. As can checking her last tax return .

My guess is that's it's £6 k salary and £6 k dividends . So she probably has some employments rights as well . Defo need legal advice

wowfudge · 10/11/2015 19:51

The company accounts should detail dividend payments. The incorporation documents and annual returns will show whether you were a shareholder when the company was set up and are still a shareholder. Do please consult a solicitor very soon.

Littlef00t · 10/11/2015 19:52

How long have you been employed? He can make you redundant, but I'd be more worried that you've been caught Up in an almighty tax dodge.

Original poster
Clicketyclack · 10/11/2015 21:31

Thank you all so much..it is beyond helpful.I have been on the companies house site and have downloaded and printed off all the returns etc and have begun a file for myself....Freeworker is correct and there is no profit/loss statements but nevertheless I have all the returns etc. I have also made an apt with a solicitor.

OP posts:
Original poster
Clicketyclack · 10/11/2015 21:34

Oh sorry I never read all the last 5 posts.Blush. I do indeed have payslips ....I have been employed by the company since 2004

OP posts:
Original poster
Clicketyclack · 10/11/2015 21:35

Yes tax and NI been paid too

OP posts:
Original poster
Clicketyclack · 10/11/2015 21:37

I have seen that both of us were /are shareholders ..

OP posts:
celtiethree · 10/11/2015 21:46

Are you equal shareholders? In addition to salary you should also have been receiving dividends as they were declared and paid. As a shareholder you shd slso be entitled to your share of any disbursement when the company closes. If you were a director you shd have been signing docs and completing filings over the years. As suggested you shd seek legal advice.

FreeWorker1 · 10/11/2015 21:52

It depends on the Articles of Association but he might not even be able to wind up the company, start paying to a pension, pay himself, without your agreement.

It is not his company to do as he pleases. You are a shareholder too.

Original poster
Clicketyclack · 10/11/2015 22:08

I don't think there is any notion of closing the company tbh...I wonder if I will have to sign anything? Thanks for all the help Thanks

OP posts:
wowfudge · 10/11/2015 22:15

The articles of association should provide information on how the company is to be run. It was incorporated before the latest version of the Companies Act 2006 came into force so although some of it's provisions will have had an effect automatically, it's a private company and the directors can have a lot of power and structure the company to suit themselves unless the articles were updated after the 2006 act came into force.

Does it have a secretary at all? It doesn't need to have one now, but would have done at incorporation.

I think what this thread really illustrates is that there are likely to be lots of spouses who are company directors without any idea what it entails, what their duties and responsibilities are or the potential penalties if they fail to act accordingly.

wowfudge · 10/11/2015 22:16

OP do not sign anything without taking legal advice first.

Original poster
Clicketyclack · 10/11/2015 22:21

Yep you are dead right fudge....never paid any attention to any of this all along Blush. My husband is the secretary.

OP posts:
Original poster
Clicketyclack · 10/11/2015 22:21

No I won't sign anything..

OP posts:
dodobookends · 11/11/2015 09:58

If you are a shareholder, then he will have to buy your shares in order to take the company over, I think.

Im0gen · 11/11/2015 10:07

OP, does your husband work as a consultant for lots of different companies , either at the same time or one after the other ? Or does he just work all the time for one company , where he used their equipment and gets paid holidays etc and call himself a consultant ?

I'm asking for a good reason BTW

OllyBJolly · 11/11/2015 11:18

If you are a shareholder, then he will have to buy your shares in order to take the company over, I think. If he has more than 50% of shares then he already controls the company

where he used their equipment and gets paid holidays etc and call himself a consultant The OP's DH works in IT - this set up is very usual in that sector. He'll work on a project basis with the ability to turn work down so clear of IR35 liabilities. Not a danger to the OP, more a danger to the client company.

As far as I can see, the OP's only concern here is the DH hiding income and assets. That's what she has to protect herself from. I don't see any other dangers.

Im0gen · 11/11/2015 13:09

That's not true olly . If she owns more than a certain percentage she can block certain resolutions . What she can't do of course, is make him continue to work for the company .

Re IR75 - I know the set up in IT, that's why I'm asking. But he might still fall foul of it and if he does, it's a possible bargaining chip for the OP . Everyone dreads an investigation by HMRC.

I'm sorry if you don't see any other possible risks to the OP but you are wrong . No one on this thread knows enough about the Ops situation to say that .

And now one who actually knows what they are talking about would give such a glib reassurance .

It's very complex and she needs legal advice

OutToGetYou · 11/11/2015 13:25

There is no way to be "clear of IR35 issues", a very odd phrase. It's not as simple as only working on 'projects' nor of being able to turn down work.

HMRC are the only ones who can decide, and they move the goal posts all the time. A friend of mine in IT has a tax bill in six figures because he thought he was OK, but he wasn't.

I write the agreements for our contractors where I work so am very clear what the potential dangers are and his some can be minimised, but it can never be eradicated. And while we're talking about it, the rules are changing again next year.

I am also a contractor myself.

The OP needs legal advice.

OllyBJolly · 11/11/2015 13:26

That's not true olly

Yes, it is true. I work with this stuff day in, day out. A controlling shareholder is very powerful and a significant shareholder (more than 25%) has a limited power of veto. Less than 25% is almost powerless against the majority shareholder.

The risk of breaching IR35 is to the client company, not to the contractor. Why would the OP want to endanger the status of the only earner in the relationship?

You're right, no one knows the full story. However, the OPs DH has set up a very usual structure which is widely understood. You are focusing on the corporate angle when the OP needs a divorce lawyer who is able to protect her income and assets - if indeed the marriage is over.

The best thing would be just to ask him to explain himself. If my DH was a director and/or shareholder of my company and we were separating I'd certainly be removing him.

Im0gen · 11/11/2015 16:49

The best thing would be just to ask him to explain himself. If my DH was a director and/or shareholder of my company and we were separating I'd certainly be removing him

I don't think this is the best thing because , with due respect to the OP, she won't understand most of his answers , whether or not he's telling the truth and what questions to ask . Her DH has clearly deceived her over a number of things, as she's unaware of any of her responsibilities under the law. Questioning him will simply give him a change to bullshit her .

And, more importantly , it will give him advance warning that she is onto him.

She needs a lawyer .

Olly , your posts make me wonder if you are the Ops husband . Your limited view of the " dangers " to the Op( the only risk is hiding income and assets ) and your simplistic understanding of how HMRC operate is odd , to say the least .

Original poster
Clicketyclack · 11/11/2015 19:34

He just works all the time for one company.....my gut is to not let him know just yet that I have discovered all this and just seek my own legal advice.Again I cannot thank you all enough for all your input Thanks

OP posts:
AcrossthePond55 · 11/11/2015 19:59

I agree, say nothing until you've gotten legal advice. If you tip him off, he'll just take whatever action he's planning right now, before you've had a chance for a pre-emptive strike.

See a solicitor ASAP

OutToGetYou · 11/11/2015 23:02

"The risk of breaching IR35 is to the client company, not to the contractor. "

That's completely wrong. HMRC can take all your 'earnings' from you, if your contract is caught by IR35 and has been operating as if it is outside it. At very least you have to pay the back-dated NI and unravel all your claimed expenses.

People aren't worried about IR35 for nothing you know. I pity your employers Olly if this is what you do for a living.