Sharing Profit without losing Control

Retaining talent or to give special rights to specific investors or creating an incentive for associated businesses to use your company are all good commercial reasons why you might create multiple share classes.

Normally you would have Class A Shares with voting rights (so that the ownership is kept unchanged) and the other Classes of Share (for example Class B etc) would receive a share of the profits via dividends. Setting these classes up is quite straight forward and guidance is available from Companies House.

But watch out for the Settlement Legislation(rules which seek to prevent individuals diverting income to pay less tax), take a look at this link

http://www.rossmartin.co.uk/index.php/sme-tax-news/35-sme-tax-news/451-a-new-settlements-case-with-a-twist

steve@bicknells.net

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