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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 6849
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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I'd like to know if a limited company can have another

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Good afternoon
JA: Hi. How can I help?
Customer: I'd like to know if a limited company can have another limited company as a director?
JA: Have you talked to a tax professional about this?
Customer: Not I haven't
JA: Anything else you want the Accountant to know before I connect you?
Customer: No, thank you. That's it

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
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Thank you for your question.

A LTD company can't act as a director of another LTD company.

Almost any person who is at least 16 years old can be a director of a UK company, even if they do not live in the UK. There are a few restrictions which can prohibit someone from being a director, such as if a person is an undischarged bankrupt, or if a person has been disqualified from acting as a director.

Guidance from Companies House on appointing a director here

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Customer: replied 10 days ago.
Thanks very much.
If I am one of two directors of a limited company can I pay dividends into another limited company I direct alongside my wife?

Thank you for your reply.

Dividends are paid to shareholders and not to directors and/or third parties.

It is irrelevant that you are a director of a limited company.

If you wish to put money into the second company, you need to receive the dividend into your personal bank account and then transfer it to the second company as director's loan to the company.

I hope this is helpful and answers your question.

Customer: replied 10 days ago.
Thanks very much for clarifying this. That's very helpful.
I am employed by the NHS and have a personal income above the personal allowance threshold. As a director and shareholder of a limited company am I legally required to pay myself a salary for my participation and labour in the company? Or can all the profits be paid of as dividends?

Thank you for your reply.

You are not legally required to pay yourself a salary out of your own company. You can draw money as dividends and pay income tax on these dividends (first £2,000 of dividends are covered by dividends allowance, similar of tax free personal allowance).

You may wish to draw a mixture of both..small salary below the threshold where both employee and employer make NI contribution and a dividend.

I hope this is helpfuland answers your question.

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