Limited Companies

[jon1965]

Quick question
Does a Limited Company need to have more than one shareholder?

If the major/only shareholder dies suddenly how does the company continue to operate?

[Sapphire]

Re: Limited Companies

Here you go, have a read https://www.gov.uk/limited-company-f...n/shareholders

[jon1965]

Re: Limited Companies

Thanks
It seems that you can have a limited company with one shareholder , now the question arises as to how to operate the company.
From that one limited companies there are several other sole trader businesses but all payments go through the limited company.
Way too complicated for me to get my head round.

[Sapphire]

Re: Limited Companies

The best person to get on this is Tuttsi, her hubby is an accountant and she'll be able to help I'm sure.

[jon1965]

Re: Limited Companies

Thanks Sapphire
I should add that non of this directly affects me but a friend is the sole trader who does the jobs and hence there is money in the Ltd companies account for upcoming work . Without gaining access to that money this work can not be done
I am being quite matter or fact about it but that's what i do

[FlamingParrot]

Re: Limited Companies

Thanks Sapphire
I should add that non of this directly affects me but a friend is the sole trader who does the jobs and hence there is money in the Ltd companies account for upcoming work . Without gaining access to that money this work can not be done
I am being quite matter or fact about it but that's what i do

What is the relationship of your sole trader friend with the Ltd company? Does he offer his services to the company on a self-employed basis? Is the company not paying him for his work?

Tell us more... :typing:

[jon1965]

Re: Limited Companies

Ok. Lets call them person A and personB.
They went into business . However the limited company was put in person A's name for various reasons part of was an unresolved immigration issue with person B. Person B already was a sole trader. All orders came through to company A and also all payments. For want of a better expression the jobs were then subcontracted out to the sole trader and paid for on completion. There was then a profit share from the limited company.
So now we come to the difficult bit. A died this weekend very unexpectdley. There is money in the limited company that has been paid by clients for jobs not yet done. These jobs are weddings etc. If B can not get paid he will be unable to do the jobs.I have suggested invoicing the ltd company for all outstanding jobs just so that he becomes a creditor of the limited . Everything had up to now been done on an informal agreement with A keeping all the records. There was trust between the two.

[wales01man]

Re: Limited Companies

If the sole trader is not a signatory of the LTD cos bank how and why should he have access to the money,surely they invoice the company then get paid

[TUTTSI]

Re: Limited Companies

From a legal prospective the executors of the estate should be able to arrange for a new director and sale of shares (whatever is agreed) to allow the business to carry on. Just to add to this a Ltd company cannot continue to trade without a director so this needs to be sorted and quickly.

[labman]

Re: Limited Companies

As I read it there is still a director, not a shareholder. Does this change things?

[TUTTSI]

Re: Limited Companies

Good point Labman, every LTD company must have at least 1 shareholder I took this from the site which Sapphy posted up earlier - "Every limited company must have at least one shareholder, there’s no maximum number. Directors can be shareholders" A company cannot operate without a shareholder so the executor for this shareholder who has died make someone a shareholder so that this company can continue to trade.

[jon1965]

Re: Limited Companies

I will finish off my post when I get a proper signal.No idea how his next of kin gets a new director in place.

[labman]

Re: Limited Companies

I will finish off my post when I get a proper signal.No idea how his next of kin gets a new director in place.

Nor me, but if he was the only shareholder he owned the company outright. I would imagine the executor will need to sell the company as part of the estate for a realistic price (the best attainable), as with any other asset of an estate - it will have to be disposed of.

If there was a written contract or agreement in place between the sole trader director and the owner regarding the work, then that may continue or may need to be renegotiated. If there was no written agreement, the sole trader may have to tender for work alongside others.

Is the sole trader in a position to be able to buy the shares in the company? That would be the easiest solution if he can afford it.

[ostell]

Re: Limited Companies

The share in the company will pass to whoever inherits from the deceased. Therefore there is still one share in place. Problem now is director so perhaps an approach to the owner of the share?

[labman]

Re: Limited Companies

That makes sense!