Legal Question in Business Law in California
Straw liability
A wealthy friend pays me $3K/mo to use my Sub S corp as his own. I do nothing except sign appropriate papers, tax returns, etc. My corp now has $4M+ in assets and $300K+ in revenue. What are the legal ramifications of this arrangement?
2 Answers from Attorneys
Re: Straw liability
If you are the 100% owner of this corporation, you are personally liable for taxes on 100% of the income of the corporation. You may owe the IRS hundreds of thousands of dollars in back taxes and penalties. I strongly suspect you are being defrauded. See a lawyer and a tax accountant immediately. Possibly the situation is harmless, and for your sake I hope so, but the facts sound alarming!
Re: Straw liability
Full civil and criminal and tax liability for anything he does wrong.
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