Can two people jointly purchase a single share?

Question

I am looking to buy shares in a private, non-listed company whose shares are quite costly. (We're in the UK.)

To keep things simple, let's say I'm looking to buy 1 share at a cost of £50,000. (These aren't the actual numbers but round numbers are easier!)

I can't afford £50k on my own. However a colleague is willing to go halves with me to make the full amount: we both put in £25k each.

Initially we were planning to register a company to purchase the single share, with us as the two directors. The company would exist purely to hold the share. However this appears to lead to some onerous tax implications as HMRC would consider that a Close Investment Company.

As there is only one share for sale can we only use one name as the shareholder? Or can we be listed as joint owners?

Answer 1

After consulting an accountant, it would appear there is no problem with the shares being held jointly in two, or even more names.

In the event that the shares attract a dividend it would be split equally between the shareholders and would have the same taxation implications for the shareholders as all UK company dividends.

Thanks for all help provided!

Answer 2

Although not fluent in the British law, I'd suggest looking into forming a partnership. That would simplify both the tax and the bureaucratic implications. Remember to put in writing all the agreements between you and your partner, consider having a lawyer drafting that.

Of course, for a definitive answer, you'd have to talk to a professional tax accountant licensed in the UK (England?) and a lawyer, which I'm neither of.