Legal Question in Business Law in Michigan

Is it legal for the owner of an LLC to treat the company like their own piggy bank even when many of their vendors have not been paid? More specifically, if the company has been paid for jobs, but tells their contractors that they don't have the money to pay them for those same jobs, is it legal for the owner of that LLC to pay her husband (who doesn't technically work there) an $80k salary and cut checks from the business for her child's college tuition and a vacation house on top of the $80k salary she already pays herself?


Asked on 3/28/12, 7:28 am

4 Answers from Attorneys
JASSI SACHDEV LAW OFFICES OF JASSI S. SACHDEV, P.C.

NO

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Answered on 3/28/12, 7:36 am
Patrick Tracy Patrick J. Tracy, Esq, P.E.,

The simple answer is no. These activities are basically self dealing for the owner. There are serious consequences for these acts. I don't know how you are involved or not involved, therefore I cannot comment further.

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Answered on 3/28/12, 7:36 am
Timothy Klisz Klisz Law Office, PLLC

These contractors must act quickly and decisively. They must file suit against the contractor or they may never get paid as the LLC seems to be on a path of destruction. Contact me to discuss in detail. Tim Klisz kliszlaw.com

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Answered on 3/28/12, 7:43 am


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