Legal Question in Business Law in New York

Business partner with tax problems

I am in the process of starting an LLC and was advised that I should have a partner, since it positively affects how I will be categorized for tax purposes. I am willing to put my business partner on as a member, however, he has tax issues that he is currently dealing with. How will this affect me in the long run? What can I do to alleviate these issues? I appreciate any response. Thank you


Asked on 8/17/07, 1:15 pm

2 Answers from Attorneys
Christopher Hoyt The Law Offices of Christopher W. Hoyt

Re: Business partner with tax problems

You should think long and hard before bringing a partner into a business. Your partner would have a number of legal rights and could significantly impact the future of your business. I would speak with a business attorney in detail prior to bringing another person into your business. Please feel free to contact my office if we can be of any assistance.

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Answered on 8/17/07, 1:30 pm
Nancy Delain Delain Law Office, PLLC

Re: Business partner with tax problems

Tax issues lead to big problems. Tax issues in a would-be shareholder or member are a red flag for a new closely held business.

Do NOT try to get through this on your own; if you bring in someone with tax issues to a closely held company, you will NEED a lawyer.

Notice that I do not in any way state or imply that the person with tax issues has done anything illegal or even incorrect; I have no knowledge of that. Tax issues happen all the time to perfectly respectable, law-abiding citizens. However, tax issues are a communicable disease; once a business, esp. a closely held business like yours, takes on someone with tax issues in a membership role, those tax issues tend to spread and multiply.

Good luck.

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Answered on 8/17/07, 2:15 pm


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