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55

Answer: Due diligence by the lender. It occasionally happens, and sometimes the lending officer is in on a scam, but banks do not tend to loan money where there is a large chance that they will not be paid back. It's been my experience that an LLC that borrows money will have to have some assets, or have the assets of the owner stand for the money that ...


54

Your recruiter is likely trying to avoid having to pay the employer's side of employment taxes, and may even be trying to avoid having to file a 1099 for you by treating your relationship as a vendor/service provider that he is purchasing services from, which would make your pay just a business expense. It's definitely in his best interest for you to do it ...


34

If your business operates on a cash basis (and it probably does), then income is governed by a doctrine known as constructive receipt. From IRS Pub 538: Constructive receipt. Income is constructively received when an amount is credited to your account or made available to you without restriction. You do not need to have possession of it. If you authorize ...


31

Your dad isn't an owner, that is equivalent to any stranger down the street charging you rent for a house your company owns, unless he lives there. If your dad lives there, then he is beholden to the tenant agreement with the landlord which is the LLC. If the LLC lets him charge rent, then he can charge it. The real question then becomes, why is he ...


30

It depends. If you’re on a business trip or entertaining a client then yes. However, regular lunches are not deductible on your taxes since it isn’t a business need. As always, when in doubt, work with a certified accountant. Edit: Here is a Quickbooks article on that topic.


27

Alright, so the bank would still, then, agree to lend 10K against the 10K in equity, right? That still significantly increases profits (24% vs 15%) and would afford the same loophole. As a general rule, no. The bank will loan the LLC money if the LLC has a proven income record. Banks will generally not loan money secured by stocks for this exact reason. ...


17

What did you sign when the account was opened? What did you sign when you left the company, to transfer those responsibilities? Unless the bank has a record of someone else being responsible, they are correct in billing the one who signed their paperwork. Of course this also probably means you still have access to the account, so your ex-partners should be ...


16

Where your scheme fails is the bankruptcy. It wouldn't work. You'd be personally liable: the shield wouldn't hold You get the loan. When you default on the payments, and certainly the moment they are served notice of your bankruptcy filing, the lender will go "Hold on there!" And use discovery to uncover the LLC's activities and the nature of your ...


15

Be careful, this may be disguised employment This sounds very like disguised employment. You act like an employee of the company, but your official relationship with them is as a contractor. You gain none of the protection you get from being an employee, and this may make you cheaper, less risky and more desirable for the company who is hiring you. ...


15

Typically you give a loan to the company from yourself as a private person, and when the company makes money the company pays it back to you. Then the company pays for all the expenses with the money from the loan. Even if you don't want a business account yet, you can probably ask your bank for a second account (mine in the UK did that without any ...


14

LLC doesn't really mean anything to the IRS. Your business filing requirements depend on how your LLC is treated for tax purposes. If you have a single-member LLC, then it's not considered a separate business entity by the IRS, you'd file a Schedule C like any sole-proprietor, and you only have a Schedule C filing obligation if your income is over $400 for ...


13

If you are talking about a home office, you don't "charge" the business anything. If the area is used exclusively as an office you pro-rate by square footage just the actual expenses. TurboTax recent published an article "Can I Take the Home Office Deduction?" which is a must read if you don't understand the process. (Note: I authored said article.)


13

Could anyone tell me if it is legal for my dad to charge me rent for the property that I am renting? Wouldn't any profit from my rent go to the LLC holders, myself included? Would this differ in certain states or is it the same across the board? Let's see if I understand correctly. Your parents originally purchased the property At the time you ...


12

If I were you, I would go to the bank right now, pay the $100 and close the account. I would stop the bleeding first then consider the fallout later. Do you own the account jointly with your partner(s) as a partner or does the partnership (a separate formal entity) own the bank account with you a named representative? Those are two very different ...


12

Let me take a guess at the arrangement: Your Dad purchased the property. Your Dad, as he is getting old, didn't want his estate to pay taxes on his death, so he gave the property to the LLC which is in you and your brother's name. This way, you will get a larger inheritance. When he did this, he had a gentlemen's agreement with you guys that the property ...


12

I think you simply need to understand credit risk. A newly formed Corporation with zero operational history and a $10,000 bank account is, from a default risk perspective, a suicidal toddler with $10,000. The simple fact that you own 100% of the stock of the corporation doesn't mean your assets and credit history get to be a factor in a corporation's ...


10

SOS is Secretary of State. SOS number is the number the Secretary of State office assigned to your entity. You can find it on the LLC application form that you submitted (assuming you kept the copy of your application returned to you), or by searching for your entity on the SOS site here (the first column, "entity number", is what you're looking for).


10

Yes. If the boss owes the money and the boss owns the LLC, the LLC is part of the boss' assets. They can come after it. LLC protection work up the chain, not down it. Also, this is irrelevant if the boss has a payment plan. They won't go after any other assets as long as he keeps to the payment plan. If he is doing this and planning to default on the ...


9

In my experience, any kind of equity you may be offered by the company is just a carrot. Your offer may be written in such a way that your potential ownership represents, say, 1% of the company today. But if the company goes for a round of financing your ownership percentage can get diluted. If this happens a couple of times and the terms of financing aren't ...


9

I did not file taxes on last season winnings as I’ve received conflicting advise (particularly regarding self-employment taxes). I have all my documentation to support my winnings should I file as a professional gambler. Oh dear. Get a GOOD tax adviser (licensed as EA, CPA or Attorney in Nevada) who's specializing in providing services to people like ...


9

Since I can't transfer/gift shares directly to my Roth IRA, what's the most tax-efficient way for my Roth IRA to take ownership of as many units of XYZ LP as possible? None. XYZ LP has some high fair market value so selling those shares directly to my Roth IRA seems incorrect. Also - illegal. I thought of incorporating an LLC ("MY-OWN LLC"), ...


8

First, yes, your LLC has to file annual taxes to the US government. All US companies do, regardless of where their owners live. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries. ...


8

As far as the spam mail goes, I own a rental (in Connecticut) and live in Massachusetts, I get very little mail related to this property. I view this as a non-compelling reason. Your other reasons pick up quick in value. The protection from the rest of your assets is helpful, and the one con for most is the inability to get a loan with such a structure, ...


8

The cost will be around $300-$500 if you do it correctly it in Florida and can be over a $1,000 if you do it in New York (New York is more expensive due to a publication requirement that New York has for LLC’s). The price ranges I’ve given include filing, state fees, getting a tax ID number (EIN), operating agreement, membership certificates, registered ...


8

As discussed in the comments, the best approach is to make a loan to the company. Make sure you document the terms of the loan including when it is repayable and any interest due. If you want to be able to retrieve the money for personal purposes then just note that it's repayable on demand. In practice if you just transfer money to the company when needed ...


8

As an ordinary shareholder, yes you are protected from recourse by the debtors. The maximum amount you can lose is the amount you spent on the shares. The rules might change if you are an officer of the company and fraud is alleged, but ordinary stockholders are quite well protected. Why are you worried about this?


8

From Wikipedia: If a company with limited liability is sued, then the claimants are suing the company, not its owners or investors. A shareholder in a limited company is not personally liable for any of the debts of the company, other than for the value of their investment in that company. Summarized, no, if you buy stock from the regular stock ...


7

Your best approach is to assess rent levels in your local area for offices of a similar size. You need to take into account all the usuals - amenities, parking, etc, just as if your home-office was provided by a third-party. Get your $/sq ft and work out the monthly amount. With this figure, you need to then work out what % of it you can charge. If the ...


7

I'd have a good look at how much anonymity an LLC offers in your state - as far as I'm aware this varies from state to state. Out here in NV an LLC owner's privacy is supposedly fairly well protected, but in other states, not quite as much. Also keep in mind that while the LLC offers some protection (and I'm a big advocate of this sort of structure if you'...


7

According to HMRC the company is required to register as an employer for PAYE if any of the following is true: you're paying an employee at or above the PAYE threshold you're paying an employee at or above the National Insurance Lower Earnings Limit the employee already has another job the employee is receiving a state, company or occupational pension ...


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