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What happens to an LLC's liabilities once its dissolved?

Ridgewood, NJ |

I started an LLC 3 yrs ago, and may have made some legal mistakes. I was performing a service for private families who wanted me to help them find and screen domestic workers for them to hire as 1099 contractors. Im basically a recruiter for private families. 3 yrs of very happy clients, but NJ (labor dept) just audited my business, and said what I was doing was wrong because those workers can not be classified as 1099's, only employees and they want me to pay the workers payroll taxes.?? Crazy right? The families hired and paid them, I was just the recruiter. Regardless, if I dissolve my LLC tomorrow, what happens with NJ's case against my LLC?

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Attorney answers 4

Posted

It is not very likely that this will satisfy the desire of the state to collect those taxes. Get an attorney here. It could be quite costly to you especially if they want you to pay BOTH sides of the employees' taxes.

This should not be considered legal advice and is intended for educational purposes only. It does not constitute a contract for legal services between any parties. Answers are given to questions for which there may be additional facts not mentioned which might change the legal issues or consequences.

Posted

the LLC does not provide you with protection from liability if you owe taxes. if I were you I would hire an attorney to start negotiating with the state and making arguments on your behalf. if you try to avoid it they will take your bank accounts, take any tax refunds you would ever get in the future and get a judgement against you.

Attorney answers to questions are for general purposes only and do not establish an attorney-client relationship. There are always specific facts that are important for an attorney to review before providing advice to a Client. In no way should you rely on the response provided herein to conduct your legal affairs on your own. You should always hire an attorney before you rely on advice provided.

Posted

Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania, Delaware, New Jersey or Federal law apply, unless otherwise specified.

That being said, the LLC will NOT protect you from liability here - and NJ is the least of your worries. This proceeding may get the attention of the IRS. Both NJ and the IRS are very aggressive in pursuing unpaid employment taxes. You need an attorney ASAP with tax and litigation experience. I'm unclear as to your liability, but it would seem clear that the families who hired the employees are directly liable. You may have to get them involved - but first, get an attorney on your side. This is a tax issue, so I'm changing the practice area for you.

/Christopher E. Ezold/

I am an attorney licensed in the Commonwealth of Pennsylvania, and the States of Delaware and New Jersey. My practice includes employment, business and health care law. Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania, Delaware, New Jersey or Federal law applies.

Posted

The state's case against your LLC becomes the state's case against you. See a lawyer to help you through this situation.

The content of the this submission is intended to provide general information on the topic presented, and is offered with the understanding that the author is not rendering any legal or professional services or advice. This submission is not a substitute for legal advice. Should you require such services, retain competent legal counsel.

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