Mon 07 Dec 2015
I have a general query for you; I am going to start buying buy-to-let property investments in a company next year and am wondering how old my daughters have to be before they can be made shareholders in the company?
Can you please advise?
There are no restrictions on shares being held by or registered in the name of a minor, but there are several issues that should be considered before deciding to proceed with your plans. A company must have at least one director and to be a director one must be at least 16 years old. The Articles of Association of the issuing company must not contain any restrictions against the shares being held or issued to minors.
The minor will have the right to repudiate/disown her membership/ownership during their minority or within a reasonable time of attaining majority.
Where the shares are registered in the name of a minor, sale of those shares before the child reaches the age of majority could give rise to difficulties due to limitations on the minor’s legal capacity to enter into legally binding contracts.
Lastly, and importantly, there are tax implications resulting from this form of ownership and you should seek appropriate tax advice before proceeding with this option
Depending on the reasons for wishing to adopt this plan, there are other ways of achieving the same result, such as by creating trusts, or by conferring the legal interest in the shares on an adult (such as a parent) as nominee for the child. These are more complex arrangements which are tailor made to meet specific requirements.
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