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by Stefan Pylarinos
7 replies
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#advice #care #company #partners #tax #trouble
  • Profile picture of the author Aaron Doud
    First are debts business only or personally backed?
    If they are business only you may not be in too bad of shape depending on the company and what it does but you need to talk to a business lawyer.

    As for the taxes you will have to pay either way. Not sure how the business is set up but if it is not a corp and you are actively involved you can take loses from it to lower your taxes from your other business. Talk to a CPA.

    Also how is the company divided up?
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    Aaron Doud - Sales & Success
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  • Profile picture of the author SlowlyMan
    My suggestion would be to find a few good CPA and Attorney's. Both these offices should be willing to give you a consult free of charge. When you find someone you like and feel comfortable with, start developing a plan. Follow the plan.

    I'm not familiar with Canuuk law, but a tax default can haunt you a long time. The last thing you want is a federal office digging around in your affairs

    Mostly, don't let it overwhelm you. Take it one day at a time, one issue at a time. But please DO seek professional help.
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  • Profile picture of the author iAmNameLess
    Originally Posted by LifestyleTrans View Post

    Hey guys, I am seeking some advice for my situation with my offline business.

    I have a business of 4 years with 2 business partners. Is this a legal partnership, sole prop, s corp, c corp or what?
    Over the last 2 years, we made a lot of mistakes that is now costing us in thousands of $$ in taxes and in debt that we owe.

    The problem is, the company is slowly dying... my partners don't seem to care and aren't involved in it much anymore because they have other career paths they are pursuing. Like I said, we need to know what type of partnership you have. Who has the majority control?

    Right now I run about 80-90% of it and one of my partners is involved a bit, helping out here and there. Then I hope you own the majority share of the company.

    The problem is, we have this debt that we owe and taxes to the government, and there are only 2 options I know of:

    1) To take less income from the company, to pay off the debt/taxes.

    2) To find ways to make more cashflow with the company to pay everything off.

    Right now I am doing both.

    Cut the budget, if your expenses outweigh the income, an instant budget cut is going to help.

    It is frustrating that my partners don't give a damn.

    One of my partners basically says "Either pay me this amount of $$, or I won't help out", and unfortunately, I need his help for a part of the company and am forced to pay him that amount. why do you need his help? If you stop paying him then what happens? Do you go under?

    I've been at a point where I have lost interest and don't care much about the company and have lately just been trying to profit as much as I can, while working my ass off in IM to get out of the company.

    The good news is that I am making a decent income from IM right now and within the next year I could see myself out of the company. But the question then remains, how will we pay off the debt that is owed?

    Anyone have any suggestions or advice on what I should do?

    How can I get out of this company in the next year?

    How can I make sure the company pays off everything?

    Any advice??

    Thanks!
    suggestions and advice

    1.) Get rid of your partners, you don't need their help and it seems like they are holding back the company. If you can't pay the bills, and they don't care, then get rid of them or quit.

    2.) Talk to a lawyer and fight for total company control if you're able to. If not have a lawyer draw up papers and get out of the company. Just speak with a lawyer about this.

    3.) You can't really make sure the company pays off the debt. True partnerships are a headache, I will never EVER EVER recommend a partnership.

    So tell us, what is the actual legal filing of the business? What happens if you leave? Will they dissolve the company?
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  • Profile picture of the author russkampmann
    It is my understanding that even if it's a small corporation, that dissolving the company while owing the IRS does not necessarily absolve the debt. If it's a partnership or proprietorship, those partners / individuals would most likely still be liable for taxes due.

    Get a good tax attorney to assist you.
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  • Profile picture of the author yukinara
    since you are in Canada, there is not much we can do here since most of us are from US, the tax law may be different.
    The best advice I can give you: find a good tax advisor
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  • Profile picture of the author attorneydavid
    If it was in the US you'd probably be in a hard way. Partnerships are hard to dissolve and have unlimited partner liability possibly joint and several. Never do business with partners outside of a limited liabillty structure unless you've discussed it with a lawyer first. Be careful of cpa's they can give bad advice re structures.

    Conversely, if you don't have partners corporations are overused.

    Hope canada is better.
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    • Profile picture of the author Sue Bruce
      A business partner who is holding you hostage is bad news.

      It sounds like you need him for the company to make money.

      It's very important for you to call CRA (Canada Revenue Agency) immediately and find out the exact figure that your company owes them. Your income tax owing for 2011 tax will be owed soon and this has to be added to the total bill.

      Your partners probably so not care about the debts owed but income tax owed is a major problem for all of you.

      If your tax year ends at the end of the year, it's perfect timing to have the amount owed in writing so you can work out a paymrnt plan with the partners.

      You're right, it has to come out of the profit which will hurt you all financially.

      Do not be scared of the partner's expertise. Unless he's a rocket scientist, you can outsouce his specialty.

      Do not let them intimidate you. You are doing the right thing by trying to clear the debt. The next step is to develop a payment plan and a time frame to pay off the debt.

      At this pont, if they are not cooperating, you will need professional advice.
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