Randolph Leigh Rhett's Answers

CA corporate and LLC laws, liability of taxs for LLC and personal income, sole member LLC tax liability

While the previous answer was correct for Federal taxes, California does charge a corporate tax on LLC's and S Corps. It is about 8% of income with an $800 per year minimum. You are required to file Form 568 Limited Liability Company Return of Income. California Form 568 must be filed by the 15th day of the fourth month after the close of the LLC’s taxable year. As far as what you are paying yourself, please consult a tax professional or tax attorney for your specific situation. In...

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Setting up an entertainment business in CA, form a LLC or corporation

You are going to get a lot of people crying out "PICK ME" with a question like that. However, I suggest that you look in your existing circle. If your friend is already a working musician with booked gigs, published work and the like he should have a circle of acquaintances in the industry. He should ask people for recommendation from among that group, especially from connections that are taking care of their own business well. He should also interview several. Don't just pick the first one...

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LLC vs. S Corp

The answer depends highly on the number of owners of the business you anticipate, and what their roles will be. If you are going to be the sole owner, either works well. Both are tax free, at least at the federal level. However, an S corporation has more formal management requirements. A corporation must have a board of directors, must conduct shareholder meetings, etc. If it is just you, these formalisms can seem pointless. However, failing to follow them can lead, in extreme cases, to...

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Am I personally liable in a lawsuit against LLC for which I have been listed as a manager

Assuming that you were not named as an individual in the suit, your personal finances are not at issue. As the manager of the LLC you do have to appear at a debtor exam and provide information on the LLC's finances. Assuming further that you had nothing to do with the fax blasting, you are not a member of the LLC, and there has been no ruling to disregard the corporate entity, there should not be a judgment against you. HOWEVER... It is not the court's job to figure that out. The...

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Shares Transfer

I agree with the previous answer. The moment you bring in additional shareholders, the situation becomes much more complex and a generic answer will most likely not suit you. The transfer of shares involves many issues, not just profit sharing (which is what most people focus on). What do you want to do if either of you wants to quit, bring someone else into the company, sell out, pay themselves a bigger salary, hire their new significant other, borrow money, etc.? If one shareholder is...

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Contract dispute

In general terms, your change of circumstances does not invalidate a contract. That means that unless the contract itself says you can terminate, you have to keep paying for as long as you committed yourself to in the contract, regardless of whether you end up using the service. Likewise, if you signed the contract in your name, or the name of your partnership, they are entitled to payment from you, personally. They can come after any partner they want, regardless of who signed. It would...

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Real Estate Partnerships

A court order won't give you new rights, it will enforce the rights you have. The question is whether your partner will give you access to the partnership records without going to court. If not, you probably have no other choice than to ask the court for help. From the little information you have provided it sounds like you have no choice by to file suit. In the mean while I would tell the bank that you do not authorize any more disbursements. THE OPINION EXPRESSED HERE IS IN RESPONSE TO...

Inheretance Tax

Please be careful with this. There are reporting requirements for receiving an inheritance from abroad. Likewise the law treats the inheritance of tangible assets (houses, boats, etc.) differently that intangible assets (stocks, bonds, etc.) You should definitely speak with a CPA or tax lawyer in your area who is familiar with these situations.

Can the contractor sign on client's behalf?

This is the kind of question you are going to have a tough time getting answered on this forum because the answer can vary depending on the details. For example, did the homeowner know that the contractor was signing the agreement for them? Did the contractor sign other similar service agreements for them? Is it common in the industry for the contractor to enter agreements such as these? Did the homeowner ever accept the service? Did they ever pay? The answer as to whether the homeowner...

Partnership Agreement?

You do not need a written partnership agreement to have a partnership. However, without a written agreement it becomes hard to prove what your agreement was or even if there was a partnership. Why would you need to prove it to anyone? No matter how good your friends are, when thousands of dollars are involved it is amazing how quickly your understanding of your arrangement changes. Not only does having a written agreement tend to prevent drifting understandings, it helps if you need some...