Company Directors

For the purpose of our Financial Review Service, we identify Company Directors as those who own, either themselves or with their spouse, more than 5% of shares in a single limited company. This is often known as a proprietary stake-hold and comes with any number of benefits and challenges.

In reality, most of our clients are majority shareholders in businesses that they run, whether that be 100% or a little less, with the balance held by spouse and/or family. In this instance, the individual is, for all intensive purposes, self employed, but using the structure of a limited company for taxation/indemnity/management purposes.

One of the most common themes that we come across with Company Directors is a lack of understanding as to why they ever incorporated, other than to satisfy the recommendations of their accountant. As such, most owners continue to act either as sole traders (where many have come from) or even as regular employees, not appreciating the various benefits available to directors for long term financial planning.

The key consideration for any company director is to what degree they expect the business to form part of their assets. For some it is an almost completely separate entity – a location for employment and source of income only– while for others it is viewed as both a current asset (for salary) and often their only provision for retirement. While individuals at both ends of this spectrum may work just as hard within the business – how they view it in the context of their overall financial goals is very instructive.

When we meet with the Business Owner, we always ask them to engage with us to think about what their company really means to them. Through a comprehensive initial meeting and follow up questionnaire, we ask them to think about, and then write down, what their personal goals (financial and otherwise) are, and how they expect the business to play a part. What we find is that, by taking the time to really think about this issue, the practicalities of  incorporating their business into a financial plan becomes much more straightforward, with little need to try and force it into the process at a later stage.

With all that in mind, our main goal for the business owner is quite simple:

To show you him/her to convert company income and/or profit into personal wealth in the most prudent, efficient manner possible.

The methodologies we employ range from the relatively simple, such as showing you how to maximise pension contributions in a prudent and risk-appropriate manner, to the more complex – like altering the structure of your company to reduce taxation and increase income in the short term, and create a system that allows efficent exit in the future. Of course we will also help manage personal financial investments and outgoings, and ensure that you and your family are sufficiently protected in case of unforeseen events. You can see from the other sections of our website that we cover off all aspects of personal finance, and you can be confident that we will offer a fully comprehensive service for you.

We are not business advisors, and we are not accountants. What we will do is let you focus on the most important part of any financial planning – ensuring that your company is able to support you now and into retirement. Your accountant will make sure you pay your taxes on time and for the right amount. Our job is everything else.

Please read our Company Director Case Study for more detail on how we work with individuals like you.

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