Becoming a company director

[bunnyrabbit93]

Hi all,

My partner has started a limited company and want to it me on as a director and I will do the secretary work. I want to know if I'm on payroll and down as a director do i then need to be registered as self employed ?

Thanks

No, you won't be self-employed, you'll be an employee of the company.

If you are a shareholder you need to be registered with HMRC to complete a tax return. Takes less than 30 minutes to complete once a year.

Do you mean that he wants you to 'help out in the office' type of work, or do you mean that he wants you to be the Company Secretary? The two are very different.

I am going to have shares in the company so a director not a employee. Yeah I suppose it's more help in the office

I think that you are confused:

You can be a shareholder and do absolutely no work in the business. You get dividend income from the profit after corporation tax. Once you are given the shares then they belong to you. If you were to split up you would still own part of his business and still get a share income (but of course he could just close ether business down)

If you are working in the business then you would be an employee. You would get PAYE income from the business

Yo can be both an employee and a shareholder.

Neither you nor your partner will be self employed.

A director is a person who manages the company. They're an officer of the company, not an employee unless they have a contract of employment. Whether an officer or employee, they can be paid a wage through PAYE like any other employee.

A shareholder is a person who owns shares in a company. They get a dividend out of the post-tax profits.

Two completely different roles, although, of course, quite possible and common for someone to be both a director and a shareholder, so receive a mix of payroll and dividends.

Before you agree to become a director, you NEED to go along to the accountants to make sure that YOU personally receive advice as to your rights and responsibilities etc. Don't accept that your partner has taken advice and knows what it's all about. Make sure that you don't just end up a passive doormat in the company doing what your partner tells you. A director is a serious position, so you need to know the in's and out's of what's going on, and more importantly, you need to understand it all. Asking a question or two on a public forum isn't good enough.