So, you’ve got your limited company set up. How many different hats do you need to wear to cover all your responsibilities?
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So you’ve got your shiny new limited company, but how many roles do you have? How many hats do you wear?
Well your first hat is a top hat because you’re a shareholder you owned the shares in the company.
But remember owning shares doesn’t give you the right to run the company and your next hat is a captain’s hat. The shareholders may own the company but somebody has to fly it. The shareholders only have the right to vote on certain things in accordance with the Companies Act. If you want to retain control of your company you have to remain a director regardless of how many shares you own.
The next hat is easily overlooked it’s a lender’s hat. Remember every time you buy something for the company, that the company uses your lending money to the company so you need to record these loans both for your records and for the company’s. Your accountants going to be really pleased with you, that’s because repaying a loan can be very tax efficient for you as the owner of the company.
Your final hat is a borrower’s hat remember that when you withdraw money from the company’s bank account to pay yourself, until that money is classified either as salary under your service agreement or as a dividend payable to use a shareholder you are borrowing money from the company. In certain circumstances you might have to pay it back so if you want to protect yourself by documenting all of those hats.
Which agreements do you need? Well only three probably, a shareholders agreement, a director service contract and perhaps a loan agreement as well.
