Owner vs Only being Director - Weird Question

[kaps84]

Hi All,

I have weird question to ask.

What if I only be a director of the company and doesn't have any share holding?
I invest in the company(£200k) as per visa requirement without any shareholding, since I know the shareholders of the company very well. Job creation happens after my investment.

Do you think such a scenario can stand? and will not come under scrutiny?
Does it sound legitimate?

it's like investing in a company, be only a director and without actually being a shareholder.

To me it sounds weird but does this scenario sound to have any merit in real life? Can you think of any real life examples where such a scenario can happen.

Please be patient while answering to this weird question.


Kind Regards,

Kaps84

[nasiaziz]

a company cannot be formed without a share holer there must 1 shareholder atleast to form a company.
if not you it must be someone else.but without a shareholder you cannot incorporate a company.

[zimba]

What if I only be a director of the company and doesn't have any share holding?

That could happen however quite unlikely in most companies (assuming you are not the only director)

I invest in the company(£200k) as per visa requirement without any shareholding, since I know the shareholders of the company very well. Job creation happens after my investment.

Always protect your investments legally ! Owning shares or having a binding loan agreement with a company is highly recommended.

Do you think such a scenario can stand? and will not come under scrutiny?
Does it sound legitimate?

How are you going to prove you invested then ? You need to have a Director's loan agreement or hold Shares in that company to be eligible for award of investment points.

it's like investing in a company, be only a director and without actually being a shareholder.

Not if you are the only director. How about director's loan (lending money to the company) ?!!?

[kaps84]

What if I only be a director of the company and doesn't have any share holding?

That could happen however quite unlikely in most companies (assuming you are not the only director)

I invest in the company(£200k) as per visa requirement without any shareholding, since I know the shareholders of the company very well. Job creation happens after my investment.

Always protect your investments legally ! Owning shares or having a binding loan agreement with a company is highly recommended.

Do you think such a scenario can stand? and will not come under scrutiny?
Does it sound legitimate?

How are you going to prove you invested then ? You need to have a Director's loan agreement or hold Shares in that company to be eligible for award of investment points.

it's like investing in a company, be only a director and without actually being a shareholder.

Not if you are the only director. How about director's loan (lending money to the company) ?!!?

Thanks zimba88,

iThan It sounds like a legitimate scenario if I make a director's loan agreement with the company of my investment, where there are other director's or not in that company.

1) Owners of the company need NOT necessarily be director's right?
2) Even if there is another director (owner or shareholder or non-shareholder), the scenario still stands legitimate, if I get involved as a non-shareholder director having a director's loan agreement.

Any further thoughts?

Kind Regards,

Kaps84

[nasiaziz]

anyone can be a shareholder of a company e.g someone whos not an employee nor a director of the company
can be shareholder and take dividends.
also an employee can be a shareholder and take dividends.
shareholder means owner of the company.
director is a kind of employee of the company but at a higher position.
i am not sure because since its a requirement of the HO to work for your own business only because of which i would recommend you to become a share holder of the company and a director too.
then its upto you if u wanna invest as DL or share capital, the latter would only apply to you if you would own shares.
regards

[kaps84]

anyone can be a shareholder of a company e.g someone whos not an employee nor a director of the company
can be shareholder and take dividends.
also an employee can be a shareholder and take dividends.
shareholder means owner of the company.
director is a kind of employee of the company but at a higher position.
i am not sure because since its a requirement of the HO to work for your own business only because of which i would recommend you to become a share holder of the company and a director too.
then its upto you if u wanna invest as DL or share capital, the latter would only apply to you if you would own shares.
regards

Thanks nasiaziz ! I appreciate your response. Specially for directing attention to the highlighted.


Kind Regards,

Kaps84

[zimba]

1) Owners of the company need NOT necessarily be director's right?

Yes, people who own a company are shareholders/members but do Not need to be directors per se.

2) Even if there is another director (owner or shareholder or non-shareholder), the scenario still stands legitimate, if I get involved as a non-shareholder director having a director's loan agreement.

Absolutely. Shareholders and directors have two completely different roles in a company. The shareholders (also called members) own the company by owning its shares and the directors manage it. Unless the articles say so (and most do not) a director does not need to be a shareholder and a shareholder has no right to be a director.