Director of Two companies?

David@accountingsource

I am new to being a MIP and only recently started my part-time company, (I have no clients yet).

A friend/potential client, who is a director of a successful company (ltd) with two other directors, wishes to start a new company on his own in a similar field; and he asked me the following questions;

Is he allowed to be a full time Director of both companies?
Are there any tax implications (CT tax allowance) or regulations he must follow?
I have searched business link and Companies house website, for advice but found nothing related.

Any advice would be greatly appreciated. Hopefully this might be my first client

Many thanks David

groundy

He can be a director of as many companies as he likes. However you would have to disclose in the accounts any related party transactions between the two companies.

Also if he is a director and shareholder there could be tax implications with associated companies depending on his level of shareholding.

Only on a none accounting issue, you said he was starting a new company in a similar line of work, what does his contract of employment with 1st company say about that?

burg

groundy wrote: »

Only on a none accounting issue, you said he was starting a new company in a similar line of work, what does his contract of employment with 1st company say about that?

Even though it is a similar area is it in competition with Company 1? He has a duty of care to Company 1 and depending of the nature of the new company (i.e. in competition) he may need to make the other directors aware of his intentions.

David@accountingsource

Many thanks for you help and advice.

David