Becoming a Company Director

Jacob55

Hi,

I have been asked by my sister to be a named as a limited company director in a venture she is starting. I will not have any involvement in the running of the company and will receive no payment. I would like to help her out but I am concerned how this will effect me. I am currently a PAYE worker and do not want to loose out on state benefits should I lose my current job. I have heard stories about people unable to claim welfare if their company fails.

If I loose my job and I am a director of this company, will I be able to claim state benefits etc.?

Thanks for your help.
Cheers

JJ

blueyedson

I'm not 100% sure but i think its something like this..

I think you would be entittled to any benefits once you are not an equal share holder in the company.

When the company is set up, each director must be allocated the shares, in your case between the 2 of you and your sister should have all or most of the shares.

prospect

Biggest pain in the ass is that you'll have to do an Tax Return every year.


Regarding Social Welfare, as far as I know (And I am open to correction here), if you draw no salary your entitlements remain.

nompere

Jacob55 wrote: »

I have been asked by my sister to be a named as a limited company director in a venture she is starting. I will not have any involvement in the running of the company and will receive no payment. I would like to help her out but I am concerned how this will effect me.

JJ

Have a quick look at this page:

http://www.odce.ie/en/company_companies_responsibilities.aspx

Then read the booklet linked at the bottom of the page - paying particular attention to the bit about the criminal penalties and civil penalties.

It's not just being "named" as a director. Even if the sister is doing all the work, all the directors are treated as equally responsible and equally "involved" in the company. It's a lot to do for no reward.

Jacob55

Thanks for the input. I am re-thinking the whole thing and will probably back out.
Cheers
JJ

billybunty

years ago someone asked me the same thing and at the time I thought it would be super cool to be a company director, but, I looked into and and am so glad I didn't as the rules and legislation changed. As someone pointed out above you can be liable to so much and you have to/ obliged legally to file forms with the CRO annually.
God forbid your sisters company gets into serious financial difficulties, whether or not you are recieveing any remuneration you will be liable for any financial defaults, which in your future could restrict any loans/mortgages you might need. Thats all worse case scenario, but being an optimist (yes optimist!) I always look at worse case!
Its hard to pick someone / ask someone to be a director as you need them for the paperwork but not for the business so to speak. Could she consider trading as a sole trader and registering the name as a business name - save her a lotta paperwork too.

emigrate2012

You have to think about this a lot,will you be a director and your sister an employee taking a wage? It's a good way to run your own company {your sister} cos if it goes tits up, she'll still be able to claim the dole without hassle, but what happens to yourself? A mate of mine was asked to do this with two guys he worked with(him and other became the directors) a good few years back at the start of the boom(he was 19,to young to know any better,in construction making mad cash,min 600 to 1500 A WEEK!) but what he did't know was the guy who was sourcing all the work was banned from being a director in Ireland for ten years. When the work dried up,he fecked off home to england leaving the two boys with 30k debt to creditors(cleared mostly by selling company assets) but they still owe the revenue 12k each(thats 4 years ago,they're still looking) . My advice is find out EVERYTHING about the company/business your sis is thinking of setting up /everything bout your possible liabilities etc and have a long think about it,it's not worth falling out with family if it goes horribly wrong.Good luck!

DubTony

emigrate2012 wrote: »

You have to think about this a lot,will you be a director and your sister an employee taking a wage? It's a good way to run your own company {your sister} cos if it goes tits up, she'll still be able to claim the dole without hassle, but what happens to yourself? A mate of mine was asked to do this with two guys he worked with(him and other became the directors) a good few years back at the start of the boom(he was 19,to young to know any better,in construction making mad cash,min 600 to 1500 A WEEK!) but what he did't know was the guy who was sourcing all the work was banned from being a director in Ireland for ten years. When the work dried up,he fecked off home to england leaving the two boys with 30k debt to creditors(cleared mostly by selling company assets) but they still owe the revenue 12k each(thats 4 years ago,they're still looking) . My advice is find out EVERYTHING about the company/business your sis is thinking of setting up /everything bout your possible liabilities etc and have a long think about it,it's not worth falling out with family if it goes horribly wrong.Good luck!

I assume from the OP that the sister would be the other director and not just an employee.
As for your mate; if the company had been liquidated properly, Revenue would have been paid first and other creditors later (unless the 12k you refer to is personal tax). Sounds like they did things arse backwards.