Limited partners&#39; obligations for tax wrongdoing? To what extent are Limited Partners at risk for tax malfeasance committed by the Managing Partner? What is a Limited Partner's obligations following discovery of this sort of tax wrong-doing by the Managing Partner? To what extent is a Limited Partner subject to a back-taxes, fines and penalties resulting from financial wrong-doing committed by the Managing Partner?
Fundamentally, to what extent is a Limited Partner subject to a potentially ruinous financial situation resulting from financial wrong-doing committed by the Managing Partner? Civil tax liability Under U.S. tax law, a limited partner in a limited partnership that is taxed under Subchapter K of the Internal Revenue Code (i.e. as a partner) is responsible for that limited partner's share of all taxable income of the partnership, for all interest owed on the unpaid taxes, and generally speaking (subject to very narrow exceptions), to penalties assessed on the unpaid tax. Moreover, frequently, the limited partner has no right to be involved in the tax litigation by the tax matters partner of the partnership on the issues that matter. The limited partner's tax liabilities to the federal government and any other taxing authorities with a pass through income tax system are not limited to the limited partner's investment in the limited partnership. Criminal liability exposure The limited partner will generally not have any criminal liability for tax crimes committed by a general partner or other partnership official engaged in tax work on behalf of the limited partnership without more affirmative involvement in and endorsement of the misconduct, although the partnership itself might See U.S. v. Arthur Anderson, LLP (which was reversed on appeal by the U.S. Supreme Court because proof of intent was inadequate, but demonstrated the principle.) A limited partner would bear the limited partner's pro rata share of a criminal fine but that would be limited to the limited partner's investment in the limited liability partnership. Mitigating the harm with a lawsuit The limited partner will usually have a right to bring a civil action (i.e. a lawsuit) against a general partner whose management of the taxes of the partnership cause the limited partner to incur tax penalties, on a breach of fiduciary duty theory, but the limited partner will generally not be able to recover back taxes owed, or interest on back taxes owed, in a lawsuit of this kind. The limited partner might also be able to bring a lawsuit on other theories that might involve an award of punitive damages against the general partner or other person handling the taxes of the partnership who was involved. The legal theories are complex and many would involve a "derivative action" rather than a direct suit against the general partner or manager. Other questions The "what to do about this situation" part of this question is beyond the scope of Law.SE as it calls for individualized legal advice. A good response to this situation would be challenging to formulate for even a specialist business law and litigation practitioner with far more factual detail available. Litigating of issues like this routinely costs each side hundreds of thousands of dollars and can take multiple years.
The hypothetical situation would be a material misrepresentation of the facts, as well as a fraudulent misrepresentation - both are grounds for nullifying the contract. Under your hypothetical this is almost certainly material and is certainly a fraudulent misrepresentation. A fraudulent misrepresentation of the facts pertinent to a contract occurs when one party, to a bargain for exchange, misstates a fact and either knows or believes that the fact is not true, or is not sure whether or not his statement is true but claims it to be true nonetheless. If a party to the contract relies on the fraudulent misrepresentation and enters into a contract based on that misrepresentation, the contract is voidable by the innocent party. A material misrepresentation is a misstatement of fact that will induce a reasonable person to enter into a contract. If a misrepresentation is material to the contract, the contract will be voidable by the relying party even if the misrepresentation is not fraudulent. So, in this scenario, the contact would be voidable because there is both a material misrepresentation, as well as a fraudulent one. If the other party suffers a monetary loss because of the deceit, you would almost certainly be held responsible for any damages that may flow from the inducement.
From point 4: transferring all rights and obligations of Company A to Company B Among those rights and obligations are the rights and obligations arising from Company A's agreement with Employee. Employee is therefore still subject to the agreement, which is enforceable by Company B. If the agreement is carefully drafted, it will make explicit mention of Company A's &quot;successors in interest&quot; or some similar phrase or phrases. Even if there is no mention, the rights and obligations associated with this agreement will transfer (perhaps unless the agreement explicitly provides that they will not, but, let's be realistic, of course it does not so provide).
If you have no contract to provide the service then you have no obligation under contract law to do so. However, if you are aware that withdrawing the service could or would cause damage to their business then doing so may leave you open to a suit on the basis of negligence; particularly if you do so precipitously and without warning. You should write to them in the following terms: Despite our agreement that the contract would not be renewed you have not made any arrangements to stop using my service. Consequently I consider that by your actions, you have continued to treat the contract as ongoing. I am happy for this arrangement to continue on a month-by-month basis and will be invoicing accordingly. If this is acceptable, please respond by 4pm on x/y/z; if you do not do so I will switch the service off at 4pm on x/y+2/z
A statutory instrument that exceeds the limits of the enabling Act is void. For example, an Act that enables the executive to make regulations about companies would not support a regulation that purported to affect companies and partnerships. There are two controls in place: regulations must be tabled in Parliament and any MP can call for the regulation to be debated and voted down. anyone affected by the regulation can go to court to oppose it - there are lots of things they can argue including that the regulation overreaches its enabling Act.
Yes The directors of a company have a fiduciary duty to act within the law for the benefit of their shareholders - not to their customers, not to the government, not to the environment and not to the public. A lawsuit against the company will incur financial loss irrespective of if it is won or lost. It is difficult to see how it is in the shareholder's interest for the company to be enabling the funding of a lawsuit against it.
Yes. There have been indictments of individuals for failing to pay taxes on fringe benefits, such as the 2019 prosecution related to multiple instances of fraud including failing to report $410,000 of fringe benefits for People's Express, a bankruptcy start up airline. Often executives are prosecuted criminally, but corporations are actually easier to obtain convictions against (for example, corporations do not have protections under the 5th Amendment against self-incrimination). But since civil and criminal fines are hard to distinguish, it is more common to seek civil fines than criminal convictions against corporations, while pursuing criminal penalties against key officers and employees of the corporations. The U.S. Department of Justice has a set of policies (also here) regarding when corporations themselves should be prosecuted criminally that have parallels in state prosecutor's offices. A list of corporate criminal prosecutions in the 1990s (mostly for non-tax violations) can be found here. For example, in 1991, the Georgia Pacific Corporation was convicted of tax evasion and fined $5 million. Tax fraud prosecutions are rare but hardly unprecedented, although large civil penalties are vastly more common. There is nothing terribly new about it either. For example, an academic article on defending criminal tax prosecutions against publicly held companies was published in 1978. Simply stealing money meant for employee fringe benefits or taxes on those benefit is a more commonly prosecuted crime. At the federal level, in 2020, there were 593 tax evasion convictions in the US. In 2019, 848 people were sentenced, and in 2018 — 1,052. 945 prosecutions were recommended for tax crimes in 2020 in the U.S. In 2018, there were 1,050 recommendations. In 2019, the number of recommended prosecutions was 942, and in 2020 — 945. State tax fraud prosecutions are similarly rare but not unprecedented, although the raw number of cases per year is smaller because the federal statistics cover the entire United States, while state tax fraud cases comes from just one of fifty states. Almost all tax code provisions are the subject of fraud prosecutions at some point, and the common bond of the provisions is not the nature of the tax code section violated, but the willfulness of the violation. Detailed breakdowns of tax fraud prosecutions by type of tax code provisions violated are hard to determine, without detailed reviews of court records, because they all fall under the same criminal code sections. Many current federal prosecutions focus on tax fraud related to COVID related tax credits and cryptocurrencies. But federal tax prosecution agencies don't track fringe benefit fraud as a distinct subtype of case, and fringe benefit tax fraud could be variously classified as employment tax fraud, abusive tax schemes, general tax fraud, or corporate fraud.
The issue is not enforceability per se, it is the problem of proving what you agreed to. If the landlord adds conditions that are against your interest, he would need to show that you agreed to those conditions: if you add conditions against his interest, you'd have to likewise prove agreement. Since you both have copies of the agreement, it's a matter of comparison to see if the documents are the same. Rather than voiding the earlier agreement and rewriting everything, the change can be initialed. If you were to cross out the rent and insert a lower figure, you would need proof that he agreed to this (hence, his initials on your copy). In your case, the change is apparently in your interest rather than his, so there's no realistic way that this could become an issue (that I can think of: maybe there's a clause that has to do with the move-in date and moving in early actually works against your interest, in which case he would need to prove that you agreed. The fact of moving in early is sufficient proof of agreement).