Formation of a Single-Member Company

#1 · 19-06-2007 4:51pm #1

I read another thread below of a guy debating if to go with a Ltd Company or as a Sole Trader.

What about Formation of a Single-Member Company?
Doesn't the fact that you have to have two Directors put people off this plan?

Tax implication fears mean you would be hard pressed to find anyone trusting enough to be a director in a venture.

mik_da_man · 19-06-2007 8:17pm

Well in my case I'm going to ask my dad to go as the other director.
I will own 100% of the company but just have him as a name on the company.
I asked a few mates and this is what they did

Mik

EIREHotspur · 20-06-2007 1:15am

Did you form a Company or a Single-Member Company?

Would your dad have to file tax returns or would you have to on his behalf?

Will you have to include him on Letterheads etc?

information · 20-06-2007 3:00pm

EIREHotspur wrote:

Did you form a Company or a Single-Member Company?

They are basically the same thing

EIREHotspur wrote:

Would your dad have to file tax returns or would you have to on his behalf?

Its his responsability to file his own tax return

EIREHotspur wrote:

Will you have to include him on Letterheads etc?

yes

EIREHotspur · 20-06-2007 3:05pm

So what you are saying is that you ask someone else to be a Director but that they will make no money from it as they are name only and that is what they state on their Tax paperwork?

You keep 100% of the company and buy them drinks in the pub whenever you see them in return.

Is that how most people do it?

mik_da_man · 22-06-2007 11:37am

Well from my expierence that is how it is done.
My accountant says it's common pratice for IT contractors to go this way.

EIREHotspur · 25-06-2007 12:52am

I read other threads by you Mik where you wanted to know things before you leaped regarding starting a Limited Company.

I would be interested in hearing the details.

Does your fellow director have to sign cheques with you?
Thats a big restriction.

mik_da_man · 25-06-2007 12:11pm

With the cheques I can sign them on my own. I checked this with the bank
The other director does nothing really!
I own 100% of the company and Profits.

if you need any more info let me know and I'll try to help.
But i'm only starting too

Mik

information · 25-06-2007 2:27pm

mik_da_man wrote:

With the cheques I can sign them on my own. I checked this with the bank

When you open a business account you tell the bank who can sign the cheques

mik_da_man wrote:

The other director does nothing really!

That is their choice, directors run the company, technically depending on what is in the memos&articles the other directors could do lots of tings in the running of the company.
The other director is also responsible for any problems caused by the company if it is not run in a correct fashion.
So it is in their interest to have some dealings with the running of the company.

mik_da_man wrote:

I own 100% of the company and Profits.

You own 100% of the company.
The company owns 100% of the profits.
The directors decide how the profits are distributed.

If you get someone to be a director in name only.
They must ensure that they trust you to run the company correctly.
You must trust them to allow you make the decisions.

mik_da_man · 25-06-2007 5:06pm

All the points I made were in relation to MY company and how it works (will work).
I realise that different companies can be run in different ways

Mik

EIREHotspur · 26-06-2007 4:48pm

So what provisions do you make for paying yourself?
You just pay yourself by cheque each week and put that in a simple accounts book or what?
If your business goes slow some weeks do you reduce your salary?

Would like to know all the little details.

Do you use an accountant or will you do that yourself?

edanto · 17-06-2008 5:43am

Just wondering what option you picked EIREHotspur and how it worked out for you?

onedmc · 17-06-2008 6:03am

If the 'silent' director has limited share capital then he/she has limited influence on the operation of the company.

But they must sign-off on the books, they deligate much of the responsibility for making sure that they are correct to the company secretary (you ?) and in effect they are in the same position as your accountant - having to believe what you say.

Single director companies are not popular in this part of the world. They were only brough in to comply with EU (spanish i think) regulations. I dont think irish/uk accountants are keen on them as it means they cant prove to the revenue that you lied to two sets of people if it turns out that you fudge your receipts.

Family members are usually used by small ltd companies. Bigger companies will use independent directors.

Just GO AND MEET AN ACCOUNTANT, he'll tell you everything you need to know. They dont normally charge for this so you can meet as many as you want until you find one that you figure you can work with.

thecleverone · 19-06-2008 3:43pm

Single director companies are not popular in this part of the world

Thats because they don't exist in Ireland. (Well not yet anyway). Give it another 18 months.

MartMax · 22-06-2008 10:13pm

the company is owned by the shareholder(s) who in turn decide/appoint/sack the directors. shareholders aka members can also be directors. shareholders don't run the company but directors do. just to illustrate things in simple way.

arch20000 · 25-06-2008 1:00pm

onedmc wrote: »

Just GO AND MEET AN ACCOUNTANT, he'll tell you everything you need to know. They dont normally charge for this so you can meet as many as you want until you find one that you figure you can work with.

Where is a good place to find a reasonably priced accountant for a small sole trader in the service sector? I'm a psychologist and do private work but am wondering how to set up as a sole trader. I've heard prices and they are all over 1500 yoyos. Is that correct? Can anyone point me towards reasonably priced accountants?

thanks

Formation of a Single-Member Company

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