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I appreciate if anyone can enlighten me with their answers:

The business is not making any money yet, but I was just wondering if I'm obliged by law to employ and pay myself as the director of my own company doing director duties or not?

What if I do non-director duties, for example, conduct sales? Then do I have to employ myself as the salesperson in my company?

Is it possible not to employ myself or anyone at all and perform business activities in the company? Like working voluntarily or for free because I'm not planning to take out any money out of the business for the first few months.

  • Even if you do not get a salary, you are not actually working "for free", since the value of your company should be increasing thanks to your job. And the schema you propose (you "do not work" for the company so you claim to be unemployed, but your company gets paid for your work) is dangerously close to fraud. Handle with care. – SJuan76 Jun 27 '19 at 14:14
  • Oh, I see your point now. My intention was to say whether if in the eye of law I would be considered self-employed, employed, or unemployed. I didn't put it clearly out there. My main concern was to know if I had to get paid as a director because I was reading contradictory information. – behosseini Jun 27 '19 at 19:11
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You’re not required to pay yourself anything — you can work for your own company for free. But if you do want to take money out of the company for your own use, that has to be done either as salary or as a dividend, and there are restrictions on dividends — they normally have to be paid equally (per share) to all shareholders, and they can only be paid out of profits so a company that’s not making a profit can't pay a dividend.

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  • Thank you for putting it in a simple way. Just to clarify, does it mean that the company can have business activities with zero registered employees and just myself carrying out various duties for free?Would my official status be unemployed? – behosseini Jun 27 '19 at 12:49
  • @behosseini Your official status will be self-employed if you’re working for a company you own, regardless of whether it’s paying you or not. You won’t be able to claim unemployment benefits. And yes, a company can conduct business activities with no paid employees. – Mike Scott Jun 27 '19 at 14:51
  • Thanks for your clarification. I am not interested in claiming unemployment benefits, neither am I eligible for it. – behosseini Jun 27 '19 at 19:22
  • Regarding your point saying that I am self-employed, Home Office puts out different information here. "Many of these [responsibilities mentioned] also apply if you own a limited company but you’re not classed as self-employed by HMRC. Instead you’re both an owner and employee of your company." – behosseini Jun 27 '19 at 21:02

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