How much money can the owners of an LLC pay themselves to not be accused of &quot;shielding funds from a lawsuit&quot;? (Context: This question is about US law). Let's say an LLC has two owners and it makes 300k a year in profit. The owners each pay themselves a (reasonable) 150k salary each year, leaving the assets of the LLC itself 0. In the event the LLC is sued, can a court pierce the corporate veil and go after the salaries that the owners paid themselves? If I understand correctly, it would have to justify that by saying the owners used the LLC as their personal bank account, with the intent to shield the money from lawsuits. But in this case the salaries are reasonable amounts, so how can the court prove illegal intent? In general, is there a maximum salary the owners can collect from an LLC before it's considered as 'shielding funds'?
If your LLC made 300K before paying salaries, and paid 300K total in salaries, that seems quite reasonable. You might have a point if the order of events was: LLC pays 100K in salaries, LLC gets sued for 200K, LLC raises salaries by 200K. Note that the owners have to pay income tax on 300k earnings, plus whatever else employers and employees have to pay. And an LLC doesn't pay salaries to owners, it pays salaries to employees who be sheer coincidence are also owners. It's a different matter if the company pays dividends. A company must keep dividends low enough so that it can run its business, including paying damages for lawsuits that it knows about. So if the company planned all along to pay 300k in dividends, then is sued for 200k, they likely have to reduce the dividends.
Normally the statute of limitations is five or six years (I think it's different between Scotland and the rest of the UK). The reason for the limitation is that if your employer asks for money back, you obviously should be able to defend yourself, for example by proving that you never received that money. After five or six years it is assumed that you wouldn't be able to provide any such evidence, so nobody can ask for the money back anymore. That's not specific to overpaid wages but quite general. In addition there is the question whether the pilots should have known they were overpaid. For example, I'm quite happy with my salary, but if it was less, I would look for and find a different job that pays better. If the company claimed in five years time that I had been overpaid all the time, then I would say that if they had given me the "correct" lower payment, I would have found a better job elsewhere, so asking me to repay the money seems quite unfair. (Why do you need to defend yourself? Maybe your salary was £3,000 per month. Someone in the right position records that they are paying you £4,000 but puts £3,000 into your account and £1,000 into their own. Then that person has an accident and their replacement finds that you were overpaid according to their records.)
What §670 BGB basically says is that the default is that companies have to reimburse you for expenses that you incurred for interviewing with them. If they don't want to reimburse you, they have to tell you so in writing before you incur any costs. That way it's your decision if you still want to go if you have to pay for expenses yourself. It does not mean your expenses have to be paid, it means you should know beforehand whether they will be paid. So what I take from your story is that you never actually asked the company for reimbursement, expecting the Agentur für Arbeit to pay that for you. Well, no company is going to pay your expenses if you don't ask for it. And that's not a crime. You also never told the Agentur für Arbeit that you were not informed beforehand that your expenses would not be paid. They asked for proof, you delivered proof. It's not their job to find out how or when you got handed this written statement and if that constitutes a violation of §670. And as a little reality check: paying your expenses (probably something along the lines of a cab fare or bus ticket?) is way more cost effective for the AA than suing a small company for the same amount. Just the time of the lawyer filing the suit will probably cost more than your public transportation ticket for the next year.
No more than using your own phone, eyeglasses or underwear while working for the LLC. These are all tools of trade than one wold expect employees of the LLC to bring to their job (especially underwear). There is potentially a problem if assets of the LLC are alienated for personal use rather than the other way around. However, that would be subject to a reasonableness test - using your work computer to book a personal holiday is eminently reasonable. Where there is a real liability issue is if the use of that personal asset caused damage to third parties e.g. if the personal computer was hacked and damage resulted. This would allow a potential plaintiff to bypass the LLC and sue the owner directly (or, more likely, as well).
Both law and accounting are subject to state regulation, so, at a minimum, work done remotely by non-licensed persons must be reviewed substantively and blessed by a local admitted professional before being shared with a client, and there are limits on what contacts with the client the back office can have. In a legal context, the back office is limited to what a paralegal can do, and that varies considerably from one U.S. state to another, especially with respect to real property matters. Mere &quot;book keeping&quot; as opposed to accounting is rarely a regulated profession under state law, but as in the case of legal services, the distinction between accounting that requires a license and activities that do not require a license varies from state to state (although less dramatically). The notion of selling &quot;forms&quot; is well recognized, but what crosses over the line from selling a &quot;form&quot; to selling legal or accounting advice varies and can be treacherous. I don't know off hand if this is true for accountants in most states, but in most U.S. states non-lawyers are prohibited from having an equity or profits based interest in a law firm, and referral fee compensation is also subject to significant professional ethics regulation. Non-competition clauses involving lawyers are also subject to heavy professional ethics regulations not common to non-legal professional activities. Without a more concrete example of what the dropservicing business model would entail, it is impossible to do a very definitive analysis. Your model seems to be based upon obtaining services from a third-party and re-selling those services. For the most part, that isn't a workable business model from a regulatory perspective in the U.S. Instead, you need licensed &quot;white label&quot; providers as the face of the business and you may potentially provide services behind them in the back office. There are some services along this line currently in existence with varied business models involving somewhat similar concepts: Legal forms companies like the recently succeeded Bradford Publishing. Hyatt Legal Services Plans Private legal services insurance such as Legal Shield. H&amp;R Block and also tax services. The legal services provided by the JAG Corps to military service members. Nolo.com Union sponsored legal services plans such as Union Plus. Title insurance companies such as First American Title and related transaction execution companies. The legal defense provided incident to a liability insurance policy by companies such as Allstate. Governmental shared risk pools such as CIRSA. Donation driven non-profits such as the ACLU. The Ann Arbor Tenants Union. Temp agencies providing paralegals to companies such as this one. A few also make contract attorneys' available for a firm's one time big project. Tax software companies like TurboTax (a division of Inuit). Westlaw LexisNexis Wolters Kluwer (f.k.a. CCH).
This is a civil case, taking away your freedom is only for criminal offenses. Not paying your bills is not a criminal offense. It is up to the creditor to look for your assets, etc. A court can make you show up and answer questions about your assets and income. While you are in court the judge can make you give your gold watch to your creditor. Outside the parameters of the question there are circumstances like failure to pay child support when you do have the funds that can lead to incarceration. In some places you can be jailed for contempt of court if the court requires your presence to let the creditor have the ability to try to get access to your assets and you do not show up.
It would depend on how the ownership contract is written. 30% sounds like a minority stake, so I don't know how they could block new investments unless the contract requires a super-majority to approve new rounds of financing. How does the remaining 70% of ownership feel about this? If they are abiding by the terms of the ownership contract I don't see that this is questionable behavior on their part. This is a business relationship. Business partners may come to have different outlooks on the future of the company, and the best way to protect their investment. Consider flipping the viewpoint: "I'm a minority owner in a company I no longer have confidence in. I would like to dissolve the company and sell off the assets to re-coup as much of my original investment as I can. The other owners want to chase this to the bitter end, and do a new round of financing, which will significantly dilute my shares, without (in my opinion) giving the company a real chance of success. What can I do?" When the founder of your friend's company accepted money for shares in the company, they gave up absolute control over the company's direction. Assuming none of the parties are acting in violation of the ownership contract, the most reasonable way to resolve a conflict like this is to buy out the dissenting shareholders.
There is no general law making it illegal to lie about debts, or anything else. It is illegal to lie to a law enforcement officer in the course of an investigation. (And of course it is illegal to lie in court testimony or when otherwise under oath.) But it is in no way unlawful to decline to answer, unless a proper court order has been obtained, or other lawful means of compelling an answer. I would expect any law office to respond to such a question with something like "Am I/we being investigated? If so, send the appropriate notice and our lawyer will consider what we should tell you. If not, tell us what information you want, and we will consider and provide a written response in due course." If a taxpayer has been found to be delinquent in paying taxes, in some cases a court order may be obtained seizing assets, including unpaid debts. But no IRS agent can make such a claim on the spot, and indeed for a client to make such a payment without such a court order, or the order of an IRS tribunal (or the creditor's written consent) would itself be unlawful and would subject the lawyer to a suit by the PI (Private Investigator). When the lawyer pays a service provider, a 1099 must be filed with the IRS. If the PI is a corporation, a different form is used, but a record of payment is still required. As failure to timely file such a form is a violation of the tax code, an accusation of paying without filing would permit the lawyer to decline to answer under the Fifth amendment. If the lawyer did pay and did file a 1099 or other documentation, the IRS would know what had been payed, and would not need to confront the PI. Also, as the comment by Hilmar points out, a PI would be likely to use the cash accounting method, and so would own no tax on work performed but unpaid (as yet). So unless the IRS agent thinks the PI was paid "off-the books" and is intentionally failing to report the payment, there would be no point to such a question. And if that were he case, the lawyer would be very likely to decline to answer. I find the story quite implausible.