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Andrew Richard Edward Gale

Andrew Gale’s Answers

40 total

  • Should I become an LLC or an S corporation?

    I am a subcontractor and I currently work for an LLC, Should I become my own LLC or S corporation to help me with taxes, and to keep my assets my own?

    Andrew’s Answer

    If you were a contractor in California, I would lean towards an S corporation because of the way that taxes work here in this state. The answer will be different in other states. This is why you will go three for three on the recommendation to find a business lawyer in your state that you can work with for a long time. You need to find a business lawyer who will become your trusted advisor to answer these all of the other questions that will surely come.

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  • Can I transfer inactive incorporation from NY to Fl and activate it ?

    Enterprise moving systems inc

    Andrew’s Answer

    And, to follow on to Mr. Doland's thought, once you have the corporation up and running in Florida, you can then merge the two corporations. This will effectively close the corporation in New York and leave the Florida corporation as the sole survivor. I hope this was helpful.

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  • Can personal debt and collectors come after my S corp?

    I just formed a small S corp. To date ive made NO money. I have very old credit card debts, over 11 years, and they are NOW coming after me, i am on social services and have crazy student loans and still job, really have no means to start paying t...

    Andrew’s Answer

    I agree with the comments from Mr. Kurzon.

    Additionally, I think it would be very helpful for you to consult with a bankruptcy attorney. I realize that you have very little cash and/or cash flow, but there are many fine attorneys who will give you 30 to 60 minutes of their time at no charge. What I think you need is peace of mind really understanding your situation and a plan going forward. Though I am not a bankruptcy attorney, I think that thoroughly understanding a bankruptcy option (not that you have to exercise it) will help you get a clear picture of your options. I hope this was helpful.

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  • I live in California and plan to move to NY. Should I incorporate in DE or NY?

    I want to form a corporation but I do not like CA tax laws. Should I just incorporate in Delaware and file a foreign corp thing while I am still in CA? I do not know when but I plan to move out of CA to NY.

    Andrew’s Answer

    Unfortunately, you are not in the minority when it comes to not liking tax laws in the state of California. Double unfortunately, you cannot avoid the tax man in the state of California by simply forming your corporation in another state or by moving for that matter.

    The state of California is going to tax you on the corporate business activities that generate income in the state. If you either form your corporation as domestic to California or as a foreign corporation doing business in California, you are going to have to pay the $800 annual minimum franchise tax fee and additional taxes what you earn above a certain amount.

    I think a better way to analyze the situation is figure out which state you will do the majority of your business and form the corporation there. I hope this was helpful.

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  • Setting up a Corporation

    We are a real estate investment company investing in apartments. I set up seperate entities (LLCs) for every building that we purchase. I am in the process of setting up another company as a "parent company" to my existing LLCs (currently 2). T...

    Andrew’s Answer

    I agree with everything Mr. Doland outlined, but I think your question is focusing on the S corporation being the member of the LLC rather than the LLC being a shareholder of the S corporation.

    In the case of the corporation being the managing member of the LLC, I lean towards the S corporation.

    The selection of S or C is a tax question best answered by your CPA. I hope this was helpful.

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  • I want to start my own small business and was wondering if it was better to be incorporated or have the company a LLC?

    I am trying to start my own business and want to protect my personal assets from the company. Is it better to incorporate or have the company be a LLC? I have a home and car and some other assets i want to protect from any claim against the business.

    Andrew’s Answer

    My best advice to you is to find a business lawyer in your community who can become your trusted advisor over the many years that you will run your business. Although it seems to be a very simple question, the answers for you can be completely different depending upon your specific circumstances and vision for where the company will ultimately grow. That is why you will frequently run into the “it depends” kind of answer. A lawyer has to develop your game plan to really give you good guidance on which business entity (if an entity is really even appropriate) might be right for you.

    I met with the client just yesterday who decided to cut a few corners and form their own company using a well-known online service provider. The selection was ultimately incorrect for them. Now, they are faced with the added expense of dissolving the first business entity and creating a new business entity to make it really work for them the way that they originally intended.

    You can frequently arrange a telephone conference with a good lawyer for a modest amount of money (and occasionally free) if you start looking. Getting good advice upfront will make you a much happier person in the long run. I hope this was helpful.

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  • Can S corp bankruptcy affect only majority shareholder and not minority ones? Majority signed for some debts, others not.

    I'm 75% shareholder and have signed for most of the debts of the corp. Two other shareholders have signed for none. If I file bankruptcy on the debts of the corporation, I expect it will affect my credit, but I would want it not to involve the o...

    Andrew’s Answer

    To answer your question, the bankruptcy of a corporation affects all of the shareholders equally.

    When you say that you signed for most of the corporate debts, it really does depend upon the “hat” that you are wearing when you signed. If you signed as an officer of the corporation and assuming that the corporate veil is not pierced, all of the shareholders are treated equally and the debt should go away with the corporation.

    However, if you signed for the corporate debts as a guarantor for the corporation, the other shareholders should remain protected by the corporate veil, but the bankruptcy of the corporation will have no effect on the creditors ability to chase after you.

    There are a lot of moving parts of his question. I strongly recommend that you follow the advice posted by Mr. Daymude and Mr. Tardif - go consult with an attorney lawyer familiar with personal and corporate bankruptcy. It is well worth the money. I hope this was helpful.

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  • I just realized that failed to pay payroll tax, what should I do/expect?

    I operate a C Corp that had a single employee in for a few months in 2010 and a little more than half of 2011. I was in a bad car accident and health issues that caused me to fall being on filing taxes (have extensions for '10 and '11 which are b...

    Andrew’s Answer

    I know that it really stinks given the bad luck of your car accident and your health issues last year, but when it comes to paying the tax man - there is no avoiding it. You have special duties and obligations when it comes to collecting and paying payroll taxes. The best advice is to deal promptly with the situation head-on by having frank conversation with your CPA and then arranging a plan to get taxes paid as soon as possible. You will have to pay the taxes, but it is possible that your CPA could negotiate the payment of penalties and interest if you take care of it now. I am sorry for your misfortune. I hope this is helpful.

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  • Can a family run corporation fire a member of a corporation

    This is a family run corporation from which the other family members/corporate members are trying to fire a corporate member from his job with no terms for firing. They have in affect fired him effective yesterday and given then 28 days to move of...

    Andrew’s Answer

    I agree with the comments of Mr. Doland and Mr. Cornish.

    It can come as quite a shock to the person who was terminated, but there is no prohibition in a "family-run" corporation setting for board of directors to terminate a family member employee from their job. As a general principle, there is no legal requirement to provide for the “terms” of the firing. There is also no legal requirement to provide 28 days to move personal effects from the business. All of the employees of the corporation work at the pleasure of the officers of the company. The officers of the company work at the pleasure of the board of directors. The board of directors ultimately report to the shareholders of the corporation. All decisions are made in this top-down funnel of authority.

    There would be two places to look for exceptions to this general rule. First, one would look to a written employment agreement and the provision(s) that pertain to termination. The second place to look would be the corporate records, including corporate bylaws and corporate minutes, which address the issue of employee termination. I hope these thoughts were helpful.

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  • Dad signed a contract ending partnership with his nephew,sold 25% share got check,and was given a verbal promise that he would p

    pay 17 months of unpaid dues,monthly,dad asked for post dated checks but he assured him that he would pay but in cash every month.Now when dad asked ,he refuses to pay and says that ,shares are sold ,there is no written agreement and he is not obl...

    Andrew’s Answer

    Your facts are a little bit confusing because in the beginning you state that your father signed a "contract" with his nephew ending the partnership. Ordinarily, a contract of this type would contain all of the terms of separation including payment of any outstanding monies. However, at the end of the fact summary, you state that there is no "written agreement" that the nephew is obligated to pay. This would seem a bit unusual, so there must be some missing pieces to the story.

    I would strongly recommend that you have your dad meet with the business attorney in Lawrenceville to review all of the documents related to the partnership and the contract which terminates the relationship. For a small investment in time and expertise, your dad will have peace of mind in knowing all the options that he can pursue. I hope this was helpful.

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