Discussion:S Corp closing owing Bookkeeping Fee
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Discussion Forum Index --> Tax Questions --> S Corp closing owing Bookkeeping Fee
| 28 March 2007 | |
| S Corp. closes and owners open LLC. They owe me money. What actions can I Take, Owners say S closed and no one has to pay anyone. Please give me your thoughts. | |
| 28 March 2007 | |
| they can find another accountant or - if you have agreed to continue to work for them (& the amount isn't too awful) increase your rates & give no freebies. | |
| March 28, 2007 | |
| If you're still doing work for the LLC, don't do any more of their work until they pay you in full. | |
| March 28, 2007 | |
| It sounds like the question is really asking if they are allowed to simply not pay the debt by virtue of the S-corp closing. There are laws regarding what happens when a company dissolves, e.g. notice has to be given to all creditors, assets are not allowed to pass to the owners until all creditors have been paid, etc. If the owners took the assets from the S-corp and put them in the LLC, then I would say you probably have a claim against the LLC. Please note, however, that I am not an attorney, and if the amount is significant, you should probably hire one. | |
| 28 March 2007 | |
| thank you natalie, i will look into that. and i dont do the llc, another cpa does and says they dont have to pay anyone. | |
| March 29, 2007 | |
| You're welcome! It doesn't matter what the other CPA says. The law is the law, and that's where I would start. | |
| 29 March 2007 | |
| I agree with Natalie, but would add that if proper dissolution procedures were not followed, the bookkeeper has a claim against the Shareholders who receieved the assets, personally. | |
| March 29, 2007 | |
| Good point about the claim against the SHs personally. As I understand it, though, claims against the individuals are more difficult to pursue/collect. | |
| 29 March 2007 | |
| Ztom, it does not put any money in your pocket, but take satisfaction from the fact that the "new" CPA will also end up being stiffed in a year or so. Overall, I'd drop it, unless the amount due justified hiring a lawyer on contingency: get a creditor's rights lawyer. | |
| 29 March 2007 | |
| I have had a few of those over the years and you can normally see it coming, I hate but I have come to understand it is business and most of the time it would not be worth the trouble to try and get a judgement since you know you will never collect it.
I would suggest you may try a 1099 C ?? | |
| 29 March 2007 | |
| Ztom,
I would be furious. I have had a few companies close over the years either due to BK, retirement, changing occupations, etc and I have always been paid even after the company has shutdown. The owners/individuals will either set the money aside or pay me from their personal account. Take them to court. Nine times out of ten most individuals/companies will pay once they have been served a warrant in debt. Very few actually want to show up in court and explain the situation on why they felt they didn't have to pay. I can just see the judges reaction to "We closed the business. We do not owe anybody now." I am sorry, but I cannot stand people who think they are going to get one over the system. If someone performs a service for you and you are happy with the results, then you pay....period. | |
| March 29, 2007 | |
| I would caution everyone on the use of court as a legal threat. This can come back to haunt you, especially in a situation where a company closed. It would be very easy for the owners to say that the bookkeeper/accountant/tax preparer was the cause of the closing and come back with a counter suit. An attorney can help guide you in the steps to take to try to collect the money, but that last step needs to be very carefully considered. | |
| 2 April 2007 | |
| Natalie, I agree with you. It seems like when something like this happens they want to blame us instead of themselves | |
Bottom Line (talk|edits) said: | 2 April 2007 |
| Do you still have any of their records? You may or may not be able to hold them for ransom (varies with state law and your certifications) but you can be very slow to provide them. Also, is a "storage fee" permitted in your state? | |
| 2 April 2007 | |
| If the amt is small enough, you can go to small claims ct and sue the corp and the shareholder in one action. There is something called breaking the corp veil. | |
| April 5, 2007 | |
| I've seen "breaking the corp veil" posted at least twice in this forum. The correct terminology is "piercing the corporate veil." | |
| 5 April 2007 | |
| ZTOM, You do over 950 returns. This happens once in a while. Learn from it. Get paid up front on a flakey client. | |
