- Complex tax rules apply to dealings with company shares.
- If a matter is not within your area of expertise, you should seek specialist advice.
You acted for the family when Celia’s parents, Tom and Mary, brought her into the family business by making her a shareholder. They decided to issue enough shares to make her an equal shareholder and because they loved her, the shares were a gift. You duly prepared an application and directors’ resolution and, after signing, sent them off to the Company’s accountant. They didn’t want to transfer any of their existing shares, which they had held since the Company was set up in the early 1980s.
Celia’s partner, Geoff, worked in the business and they all got on very well. So, when Celia asked her parents a few months later if she could transfer half her shares to him, they were happy. Once again you fixed up the share transfer and directors’ resolution, and sent them off to the Company’s accountant – about 10 months after the issue of shares to Celia.
Happiness didn’t last long. Geoff, who thought Tom and Mary were a bit old fashioned in the way they ran the business, persuaded them to give him a management role where he quickly demonstrated his unsuitability as a manager by bullying the staff and making some very bad business decisions.