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Can you pay one shareholder & not another?

Sun, 11/12/2011 - 20:13 — maha

Me and my partner are both the only shareholders of a company. He however has is working full-time so will be taxed a lot should he receive company dividends. So basically we want to pay dividends to me and not  to him. Is this legal? 

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simondeans's picture

Hello. Do you have different classes of shares? If so, it ought to be ok to pay dividends on one class only. If you don't have different classes of shares you are likely to both be taxed on the dividends as having received them, even if your partner is not taking his. To change to two classes of shares you'll need to update your Articles of Association and pass a special resolution. I would suggest you take advice from your corporate lawyer to ensure you get it right.

Mon, 20/02/2012 - 16:32 — simondeans

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