valuing private ltd company shares


B

bill

Dear Group

Does any one know how the DWP values the shares of a private Ltd company.
i.e not listed stock exchange maybe only one or two share holders, so
minority and majority share holdings may exsist company has £10,000 of
working capital?
Company was used in my employment as required by customers and to provide
Limited liability protection.

Bill
 
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M

Marvin

I don't think they will attempt to actually value the shares.
As a company director they will instead look at the value of the
Dividends your are entitled to receive.

E.g. the company profits, divided by the total number of shares,
multiplied by the number of shares you have.
Any wage you drew from the company would be taken into account on top
of this.
Obviously would need accounts to determine the profits and the number
of shares and therefore the dividends.
PS - the value of any capital invested in the business in ignored.
 
M

Mike

PS - the value of any capital invested in the business in ignored.- Hide quoted text -

- Show quoted text -
Only whilst the business is trading or during a temporary stoppage
such as due to sickness. Once it's evident the business is not going
to trade the capital assets can be TIA.

As a director of a LTD company the OP is an employee so the DWP is
likely to want accounts to show what wages are drawn and whether they
are reasonable i.e. he's failing to draw a wage so he can get more
benefit.

I recently dealt with a case where the director claimed to receive
nothing as the profit was minimal. Suspicious of this the accounts
and the customer's personal bank accounts were examined.

Sums were going from the business to personal accounts which were not
accounted for and some of the customers own houshold expenses were
charged to company accounts. It was plain the profit from the
business was substantial (poss as high as 20k) although I don't think
the chap himself knew. In the end the customer gave up trying to
claim rather than produce accurate accounts.

It's fairly common for S/E + directors to try and claim and then be
unwilling or unable to produce accounts. More often than not it's
simply they are poor businesspeople rather than an attempt at fraud.

Mike
 
B

bill

Hi Mike & Marvin

Marvin: PS - the value of any capital invested in the business in ignored

Mike :Only whilst the business is trading or during a temporary stoppage
such as due to sickness. Once it's evident the business is not going
to trade the capital assets can be TIA.

What TIA mean?

So as I own 50% of the shares in the LTD company that stopped trading and
the companies cash assets are worth £10,000 if I claim income based job
seekers I would be treated as having £5000 of capital. Would this be the
case if the LTD company continues trading with very little profit and
employee time involved that could be proven with accounts. What about the
othershare holder employee? What about valuing assets other than cash how
does the DWP value tools, a van etc to work out the value of the 50%
shareholding i have? I have noticed that self employed traders business
assets can be disregarded indefinatley if the proprietor just keeps the
business ticking over, but cannot work out how LTD company is treated.

I do not know who to contact at DWP to get advice

Bill
PS - the value of any capital invested in the business in ignored
Only whilst the business is trading or during a temporary stoppage
such as due to sickness. Once it's evident the business is not going
to trade the capital assets can be TIA.

As a director of a LTD company the OP is an employee so the DWP is
likely to want accounts to show what wages are drawn and whether they
are reasonable i.e. he's failing to draw a wage so he can get more
benefit.

I recently dealt with a case where the director claimed to receive
nothing as the profit was minimal. Suspicious of this the accounts
and the customer's personal bank accounts were examined.

Sums were going from the business to personal accounts which were not
accounted for and some of the customers own houshold expenses were
charged to company accounts. It was plain the profit from the
business was substantial (poss as high as 20k) although I don't think
the chap himself knew. In the end the customer gave up trying to
claim rather than produce accurate accounts.

It's fairly common for S/E + directors to try and claim and then be
unwilling or unable to produce accounts. More often than not it's
simply they are poor businesspeople rather than an attempt at fraud.

Mike
 
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M

Marvin

Hi Mike & Marvin

Marvin: PS - the value of any capital invested in the business in ignored

Mike :Only whilst the business is trading or during a temporary stoppage
such as due to sickness. Once it's evident the business is not going
to trade the capital assets can be TIA.

What TIA mean?

So as I own 50% of the shares in the LTD company that stopped trading and
the companies cash assets are worth £10,000 if I claim income based job
seekers I would be treated as having £5000 of capital. Would this be the
case if the LTD company continues trading with very little profit and
employee time involved that could be proven with accounts. What about the
othershare holder employee? What about valuing assets other than cash how
does the DWP value tools, a van etc to work out the value of the 50%
shareholding i have? I have noticed that self employed traders business
assets can be disregarded indefinatley if the proprietor just keeps the
business ticking over, but cannot work out how LTD company is treated.

I do not know who to contact at DWP to get advice

Bill







Only whilst the business is trading or during a temporary stoppage
such as due to sickness. Once it's evident the business is not going
to trade the capital assets can be TIA.

As a director of a LTD company the OP is an employee so the DWP is
likely to want accounts to show what wages are drawn and whether they
are reasonable i.e. he's failing to draw a wage so he can get more
benefit.

I recently dealt with a case where the director claimed to receive
nothing as the profit was minimal. Suspicious of this the accounts
and the customer's personal bank accounts were examined.

Sums were going from the business to personal accounts which were not
accounted for and some of the customers own houshold expenses were
charged to company accounts. It was plain the profit from the
business was substantial (poss as high as 20k) although I don't think
the chap himself knew. In the end the customer gave up trying to
claim rather than produce accurate accounts.

It's fairly common for S/E + directors to try and claim and then be
unwilling or unable to produce accounts. More often than not it's
simply they are poor businesspeople rather than an attempt at fraud.

Mike- Hide quoted text -

- Show quoted text -
Hi Bill

TIA = Taken Into Account.

Basically I think you have summed it up. If trading then the capital
and any other assets (tools, van etc) are ignored.
If not trading then an accountant would presumably put final valuation
on assets etc and this is split between shareholders.
There is no real issue about having to make a big profit. So long as
you continue ticking over then the benefit office is not going to
force you to fold the company or anything.

Can't really suggest anyone in particular to talk to at the DWP.
The local office will have caseworkers who follow the regulations and
guidance about income and capital assessment.
Try looking at their procedures.
http://www.dwp.gov.uk/publications/dwp/dmg/
 

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