Legal Question in Business Law in North Carolina

Can a principal in an LLC also be a 1099 employee? I have an employer who has a commission plan where the company splits with the sales rep 60/40 on commissions. However, the principal "pays" himself as a rep with a 1099. He also "splits" commissions with sales reps when he thinks he wants to.

I think he should be taking a distribution as a principal from the 60% that the company gets rather than getting his cake and eating it (and ours) too.

Asked on 4/09/14, 8:16 am

1 Answer from Attorneys

Kenneth Love Ken Love Law

Yes he can do this. If the company is a corporation in fact he has to pay himself either via 1099 or w-2.

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Answered on 4/09/14, 9:15 am

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