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Matt Jones
Matt Jones, Solicitor
Category: Law
Satisfied Customers: 671
Experience:  I am a qualified and practising Solicitor with over 7 years post qualification experience
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Can anyone here please help me out with the following issue: I

Customer Question

Can anyone here please help me out with the following issue:
I would like to open a limited company which would have someone as the director of the company. However, I would like myself to actually have full power of who I can appoint as a director of the company and I would like to own 100% of the shares of that company. The reason I would like someone else to appear as the director when it actually sounds like I would be the one who really owns the company and not myself directly is because I am currently employed by someone and although they did not stipulate in my employment contract that I am not allowed to open other companies at the same time etc., it is simply a matter of wanting to be anonymous. Obviously I would still pay all due taxes for this company etc. It's just a question of how I would like the company to appear were someone to go and check my name on company house. Would there be some kind of Deed of Surrender that the director of the company would have to sign stating that they give away their power as director to me together with 100% of the shares of the company?
Submitted: 2 years ago.
Category: Law
Expert:  Matt Jones replied 2 years ago.
Matt Jones :

Hi i will try and help

JACUSTOMER-t0wu1nri- :

thank you

Matt Jones :

Would the director be paid? i.e a salary?

JACUSTOMER-t0wu1nri- :

no

Matt Jones :

OK thanks.

JACUSTOMER-t0wu1nri- :

he is just going to appear as the official director, however, i would like to actually have the power to take him off as a director at any time and appoint whichever other persons including myself to become directors at some stage and i would like to be the one who owns 100% of the shares of the company, i.e. only i would get the profits of the company and not the director

JACUSTOMER-t0wu1nri- :

he would be aware of this

JACUSTOMER-t0wu1nri- :

are you there?

Matt Jones :

There is no reason why you cant have a company with a director named, with no shares, and you hold all of the shares. As the 100% shareholder you would effectively have the power in the company anyway as the Directors have to work for the benefit of the shareholders. You could work into a directors contract specific arrangements as to what they can and cant do, and perhaps integrate a clause the means they have to run all decisions by you

Matt Jones :

However...

Matt Jones :

bear in mind that you will effectively be a "de facto" director as you are behind the scenes making the decisions, and potentially liable for any of the decisions made by the directors

of the company, and...

JACUSTOMER-t0wu1nri- :

i do not mind being "de facto" the director of the company. i just do not want to appear on company's house behind this company in any way. it was my understanding that shareholders of a company would also be visible on company's house. Is it possible to have a separate legal document that would state that i am the sole shareholder (therefore de facto the director) but without having to officially disclose this to companies house etc?

Matt Jones :

as a shareholder you will be in the statutory books of the company, so if someone wanted to check they would find you as the shareholder in a compan

y search

JACUSTOMER-t0wu1nri- :

is there a way around this?

JACUSTOMER-t0wu1nri- :

couldnt the director be the official director and 100% shareholder of the company but sign a separate document like a deed of surrender stating that he is giving all the shares over to me?

JACUSTOMER-t0wu1nri- :

without being seen in company search?

Matt Jones :

You could have a "nominee" share agreement. So someone else would be the shareholder, but hold them on trust for you as the beneficial owner

Matt Jones :

It would bascially be a deed of trust

JACUSTOMER-t0wu1nri- :

and this agreement would not appear anywhere?

Matt Jones :

No

JACUSTOMER-t0wu1nri- :

So i could appoint someone as a director of the company i would like to form and make him 100% shareholder and get him to sign a deed of trust that he is holding this company on trust for me and that i am the beneficial owner of the 100% shares of this company, right?

JACUSTOMER-t0wu1nri- :

would i under that deed of trust be able to have the power to terminate the director as director of the company?

Matt Jones :

Not that is is holding the company on trust for you, just the shares (a small distinction but just so you have it right)

JACUSTOMER-t0wu1nri- :

ok thank you for clarifying.

JACUSTOMER-t0wu1nri- :

but then i wouldnt be able to terminate him as director would i?

Matt Jones :

Effectively you could as you just take the shares back, and wind the company up. However this may be a bit messy and not be what you want to do, let me have a think for a second .....

JACUSTOMER-t0wu1nri- :

ok

JACUSTOMER-t0wu1nri- :

please bear in mind that i would not only want to be anonymous on company searches but also be the only one who receives the profits of the company

Matt Jones :

OK. To answer your second question first, as 1005 shareholder you will take all dividends and be the only one entitled. the Director only get paid if he has a remuneration arranagement (i.e. a salary).

Matt Jones :

As to the removal, You can simply have a"shareholders meeting" (of 1!) and pass a special resolution terminating the directorship. Simple as that.

JACUSTOMER-t0wu1nri- :

wow sounds great

JACUSTOMER-t0wu1nri- :

sorry to sound stupid but i need to know this in detail. as BENEFICIAL shareholder am i basically the shareholder? because legally the director is the shareholder as i understood it and he is just holding it on trust for me so i am just the beneficial shareholder. does that make a difference?

Matt Jones :

That is correct. It is like me saying to you, please take care of my computer for me while I am away. The computer is mine, but you are holding responsibility for it

JACUSTOMER-t0wu1nri- :

so to summarise (please confirm if i got this right):

JACUSTOMER-t0wu1nri- :

i can form a company and appoint A to be the director of that company who owns 100% of the shares of the company. he then signs a deed of trust in which he declares to hold all 100% of the shares for me. I de facto become the owner of the 100% shares of the company and therefore only i get the profits of that company (and liabilities etc.) and A (the director) gets nothing.

JACUSTOMER-t0wu1nri- :

if i want to terminate his directorship

JACUSTOMER-t0wu1nri- :

i just have a shareholders meeting (which would be only me) and pass a special resolution terminating the directorship

JACUSTOMER-t0wu1nri- :

at this point

JACUSTOMER-t0wu1nri- :

i can then appoint myself as the director or anyone else as i become at this point the sole legal shareholder of the company

Matt Jones :

correct on all points

JACUSTOMER-t0wu1nri- :

at this point do i need to inform companies house that the director was terminated?

JACUSTOMER-t0wu1nri- :

would i suddenly appear as the shareholder of the company on companies search?

Matt Jones :

yes you need for fill out a termination of directors form - Sorry I don't know the actual form but you can find it on companies house

Matt Jones :

no, Remember just because the directorship has terminated the nominee sharehold agreement still subsists until you realise the shares yourself. ex-director would still be the shareholder

JACUSTOMER-t0wu1nri- :

and how would i transfer the legal shares from the ex director to the new director?

Matt Jones :

A deed of variation in the nominee sharehold agreement altering the "trustes" to the new director

JACUSTOMER-t0wu1nri- :

can the ex director refuse to accept this deed of variation?

Matt Jones :

No. You are the beneficiary, it is up to you. The alternative is you cancel the nominee agreement (which if you get it drawn correctly it will have a termination clause) and re-draw a new one (in fact actually this is probably the simplest way when I think about it)

JACUSTOMER-t0wu1nri- :

ok. so again to cap it from the stage of me terminating the directorship

JACUSTOMER-t0wu1nri- :

i then still need to fill in a termination of directors form and send it to companies house

JACUSTOMER-t0wu1nri- :

and i need to cancel the nominee agreement (which should have such a clause allowing me to terminate the directorship at any point)

Matt Jones :

(the nominee shareholding, not directorhsip)

JACUSTOMER-t0wu1nri- :

and then i can either appoint myself or B to be the next director and if i still want to remain anonymous i draw up a new nominee agreement with the same termination clause and become beneficial owner of the 100% shares again

JACUSTOMER-t0wu1nri- :

yes of course, sorry my mistake!

Matt Jones :

correct on all points again

JACUSTOMER-t0wu1nri- :

in terms of chronological order and timing what would have to be done first? first cancel directorship in a shareholders meeting and pass a special resolution and then terminate the nominee shareholder agreement?

Matt Jones :

Well it can all be done at the same time, but yes if there need to be a period of time between then this is probably the correct order

JACUSTOMER-t0wu1nri- :

ok and i assume when i send the termination of directors form to companies house i would have to fill in that form who the next director would be right?

Matt Jones :

yes

JACUSTOMER-t0wu1nri- :

but when i send this termination of directors form to companies house wouldnt they suddenly realise that i am the shareholder of the company and register it on to the company?

JACUSTOMER-t0wu1nri- :

?

Matt Jones :

It is perfectly in order to have a nominee agreement, and for someone to hold the shares on your behalf. When you sign the form to remove the director you are signing as an authorised person. Companies house wont pick any issue with this. Having said this you do raise a good point as the form will be registered and your signature will be seen. Therefore it may be better to re-nominate the Trustee shareholder first, then get them to sign the Termination of directors form after you have had the "special resolution meeting" (please bear with me whilst I am typing, I am a lawyer not a fast typist i am afraid!) :) )

JACUSTOMER-t0wu1nri- :

no problem the computer for some reason said you were offline so was worried

JACUSTOMER-t0wu1nri- :

so to recap

JACUSTOMER-t0wu1nri- :

i cancel the directorship of A by passing a special resolution in a shareholdrrs meeting and then terminate the nominee shareholder agreement and then create a new nominee sharehold agreement with B and the get B to fill in the termination of directorship form to companies house?

Matt Jones :

correct

Matt Jones :

and also when you send the termination of director in you send the notification of charge of shareholder in as well

Matt Jones :

sorry change, not charge

JACUSTOMER-t0wu1nri- :

that notification would tell them that B would become the new legal shareholder of the company i assume?

JACUSTOMER-t0wu1nri- :

(who in turn would hold it on trust for me but without appearing on companies house)

Matt Jones :

correct

JACUSTOMER-t0wu1nri- :

i assume the same procedure would apply if i had a partner and wanted A to hold the companys shares on trust for both of us?

JACUSTOMER-t0wu1nri- :

50% each beneficial owner?

Matt Jones :

yes

JACUSTOMER-t0wu1nri- :

the only thing is that by the shareholders meeting we both would have to sign that we terminate A's directorship and we both would have to appoint B as new director and legal shareholder holding the companies shares on trust for both of us

Matt Jones :

yes that is right (although, in fairness, we are straying into a slightly different question now)

JACUSTOMER-t0wu1nri- :

ok last question. would i as beneficial owner of the shares of the company be allowed to access the bank account and sign documents of the company?

Matt Jones :

That is an internal company matter and so wont appear on any public records. So yes you can, you just need to become a signatory at the bank (I not sure if the Director would still have to be a signatory as well, that is a matter you will have to check with the specific bank - it could be you you have a mandate that requires both your signature, but again you will need to check this)

JACUSTOMER-t0wu1nri- :

Wow thank you very very much Matt for your time and detailed responses! I will leave an Excellent service rating for you as this really was an outstanding service and excellent detailed advice!

JACUSTOMER-t0wu1nri- :

just before i forget do you have any good websites where i can download the relevant legal documents, deed of trust etc?

Matt Jones :

hsdad

Matt Jones :

Sorry had a computer meltdown there

Matt Jones :

had to reboot

JACUSTOMER-t0wu1nri- :

no worries

JACUSTOMER-t0wu1nri- :

hsdad is the website?

Matt Jones :

I would recommend that the deed is professionally drawn. Plus I have never really used online form sites so cant really recommend any. If you check Companies house first, then just google legal docs online and you shouldn'd go far wrong

Matt Jones :

and no hsdad is not a website I was just checking the comp was working :)

JACUSTOMER-t0wu1nri- :

Do you draw nominee sharehold agreements?

Matt Jones :

I can but I cant really recommend my self on this website

Matt Jones :

its against my agreement

JACUSTOMER-t0wu1nri- :

how much do these agreements "usually" costs to draft?

Matt Jones :

shouldn't be more than about £150 drawn professionally

Matt Jones :

but depends who you use of course

JACUSTOMER-t0wu1nri- :

and the other documents can be found online right?

Matt Jones :

yes

Matt Jones :

so an the nominee agreement, its just my recommendation

JACUSTOMER-t0wu1nri- :

if someone were to contact you directly how would they get your details?

Matt Jones :

# ***** can

Matt Jones :

hmmmmm

Matt Jones :

google?

Matt Jones :

bit difficult

Matt Jones :

if you see

JACUSTOMER-t0wu1nri- :

there are many mathew jones solicitors

Matt Jones :

yes, I know

Matt Jones :

i cant expressly state my firm

Matt Jones :

please cekc my profile

Matt Jones :

chekc

Matt Jones :

check

Matt Jones :

anyway If I have helped could you leave me positive feedback so I can be paid for my time. the question wont close and you can return to ask further question later down the line

JACUSTOMER-t0wu1nri- :

of course

JACUSTOMER-t0wu1nri- :

thank you very much for your time!

Matt Jones :

you are very welcome, all the best

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