Switch from Director to employee

trg

Hi,

New to posting on this, a most helpful forum. Forgive me if the title of thread isnt too accurate but I struggled to phrase it correctly.

Anyway, I, together with my brother, am a director of a construction company which has now fallen upon hard times like a lot of others. I understand that as a director and hence not on class A PRSI, I do not qualify to receive the dole.

My question is this - can i resign as a director...have both fathers (for example - they are retired) take over as directors....and can we then rejoin the company as normal class A employees?

What happens the shares? we have one each and do not really require them at the moment.

I understand this seems a tricky process and there may be onerous consequences so any help is very much appreciated.

jockey#1

Even though you are a director and paying Class S contributions you may still qualify for the dole however you will be means tested. This is called Jobseekers Allowance as opposed to Jobseekers Benefit.

If you were to resign as directors you would still have to build up enough contributions under Class A in order to qualifiy for Jobseekers Benefit.

Hope this helps.

trg

Thanks Jockey1, have been advised by social welfare friend that we wont qualify under means test as the wife has redundancy which is great to have left but obviously we would like to have something more continuous until our company can get back on its feet. We need 39 contributions which, if we back date resignation to start of year brings us up to end of Sept. If we cant backdate it then roughly Christmas time.

J.Ryan

trg wrote: »

Hi,

New to posting on this, a most helpful forum. Forgive me if the title of thread isnt too accurate but I struggled to phrase it correctly.

Anyway, I, together with my brother, am a director of a construction company which has now fallen upon hard times like a lot of others. I understand that as a director and hence not on class A PRSI, I do not qualify to receive the dole.

My question is this - can i resign as a director...have both fathers (for example - they are retired) take over as directors....and can we then rejoin the company as normal class A employees?

What happens the shares? we have one each and do not really require them at the moment.

I understand this seems a tricky process and there may be onerous consequences so any help is very much appreciated.

At a guess I'd say no as you would still be the owners of the company where you work, so would still be class S, there would also be the possibility that you could be considered shadow directors if things got worse (which is a possibility in the current climate).

You are class S not because you are a director but because you are a proprietary director, if neither you nor a family member owned any shares in the company then you would be class A.


Clarification
****nor a family member, there is a rule on this somewhere, but I'm not in a position to look it up at the moment, it might be wife/children or might be all family, I'm just not certain off the top of my head.

MartMax

You are only on S class if you are a proprietary director.

This might be irrelevant to the topic above. If you are a sole trader and you put your spouse on the payroll, she also won't be entitled to PAYE tax credit on that employment.