Can a child hold shares in a company ?

Can a child hold shares in a company

There is no statutory provision prohibiting a child from owning shares.

Please note contracts cannot be forced against minor thus it’s advisable that that shares are fully paid up.

Dividend income is deemed under ITTOIA/S629 to be that of the parent for tax purposes, and is not treated as the child’s. So there is no tax advantage in holding shares in a child’s name.

I read a good article which gives alternatives to registering child as a shareholder. Click here.

If the client still wants to allot share to a child. Then a bare trust is needed. There is no legal requirement to create a formal document to create a bare trust.

Name in the register of members can be simply – Mr Parent as bare trustee of Mr Child.

Dormant Company

Dormant according to Companies House

Your company is called dormant by Companies House if it’s had no ‘significant’ transactions in the financial year.
Significant transactions don’t include:

  • filing fees paid to Companies House
  • penalties for filing the accounts late
  • money paid for shares when the company was incorporated
  • More information can be found here.

Dormant for Corporation Tax purposes

HMRC views a dormant company as a company that’s not active, not liable for Corporation Tax or not within the charge to Corporation Tax. More information can be found here.

Wet signatures from client

Today a question cropped up – should accountant always take wet signatures from clients as their approval?

HMRC is of the opinion that it is not compulsory.

Client can give approval by electronic or non-electronic means.

Source Link: http://webarchive.nationalarchives.gov.uk/20140206222144/http://www.hmrc.gov.uk/ebu/2012-copyspec.pdf

 

Companies House

How many companies are registered with Companies House UK ?

Circa 3.8 million

How many new companies are formed each year ?

Circa 600,000

How many individual annual accounts Companies House is expecting each year ?

Circa 2.9 million

How many individual annual accounts are actually received by Companies house each year ?

Circa 2.7 million

i.e. 200k companies are late or do not file the accounts at all.

 

Source:
https://attendee.gotowebinar.com/recording/6419350587434964483

Increase in threshold for Small Companies Regime

What is it ?

 

A company in the UK qualifies as a Small Company if it fullfills two of the following three criterias:

 

Turnover – not more than £6.5m

Balance sheet total – not more than £3.26 m

Employee – not more than 50

 

UK Government has increased these limits to comply with EU Accounting Directive

via a new regulation

 

Turnover – not more than £10.2m

Balance sheet total – not more than £5.1 m

Employee – remain same at 50.

 

From when the rules change ?

Rules change for accounting period begining on or after 1 Jan 2016.

 

Why it is important ?

 

Small companies donot have to get their books audited.

 

This will reduce the administrative burden on lot of small companies and allow them to focus on their business.