Adding your spouse as a shareholder can have benefits for both you and your business. When it comes to running a business, there are many decisions that must be made. One of the most important choices is who will own a portion of the company. A good option is your life partner, and here’s why that makes sense. Here are the top three reasons why:
1. Dividends
You can provide him or her with dividends from the company’s earnings. Not only does this allow you to share the success of your business with your spouse, but it can also provide them with additional income.
2. Tax Benefits
By adding a shareholder who is in a lower tax bracket than yourself, you can fully take advantage of the tax savings that come from having multiple shareholders.
3. Business Continuity
In the event of the business owner’s death or incapacity, a spouse can provide continuity for the business. Having them involved in the business allows for a smooth transition, should anything happen to either of you.
A Quick Note About Voting Shares
If you intend to maintain control of your company, it’s important to remember to deny family members the ability to vote with shares issued to them. Second, the board of directors should have the authority to declare dividends. That way, especially if you’re the only director, you effectively have the authority to determine when dividends will be paid.
Who To Talk To As You Take This Beneficial Step
Adding your spouse as a shareholder can be helpful for both of you and the company. By understanding why, you have taken the first step towards making the right decision for your business.
If you are considering taking this step, it’s important to consult with an attorney who specializes in business law; they can make sure all paperwork is properly filed. Doing so can help ensure that all parties involved are adequately protected in the process.
Contact us today if you’re thinking of adding your spouse as a shareholder in your business, so we can make sure it’s done properly and that you maximize the tax benefits.
