Legal Question in Business Law in New York

Getting paid as an LLC

I own a one person LLC (sole proprietorship). This LLC provides services that

previously I provided as a private citizen. A company that I worked for as a

private citizen consented to pay my LLC for the same work that I was doing

for them previously as a private citizen. Now they want to revoke that

agreement and pay me as a private citizen again, even after paying my

company for over six months. This decision affects me very negatively tax-

wise, which is one of the reasons I started the LLC. Is there a legal recourse?

Can I demand that they pay my company, and not me? What are my rights

here?


Asked on 4/27/04, 12:36 pm

4 Answers from Attorneys
Asi Kirmayer Kirmayer PLLC

Re: Getting paid as an LLC

In general, your agreement would govern the relationship. However, you didn't indicate how long the term of that agreement was. If the agreement is terminable on short notice, you probably can't rely on it to protect you too much. If it's for a specific term that hasn't expired, you may have some recourse.

There may be other things you can do. You should consult an attorney to review this more thoroughly for you. I am happy to discuss this if you would like at (212) 695-6400.

Best of luck.

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Answered on 4/27/04, 12:45 pm
Louis Venezia Law Offices of Louis Venezia at Union Square, P.C.

Re: Getting paid as an LLC

If you have a contract and that contract is with the LLC, then the other company would be breaching its contract and you could seek enforcement. Assuming there is no contract, then you are left with your bargaining power versus theirs. If you are working for the company full-time, then the other Company may be concerned about Internal Revenue Service issues. However, a legal opinion could only be provided upon a detailed review of your circumstances. Our firm handles business relationships and you can call our office to arrange for a consultation.

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Answered on 4/27/04, 12:51 pm
Anthony Park Anthony S. Park, PLLC

Re: Getting paid as an LLC

You probably cannot demand the Company to make payments to your LLC. Did you have any sort of written agreement with the Company? Ask the Company why they decided to start paying you individually.

What are the negative tax impacts you are concerned about? As a tax and small business attorney, I can assist you optimize your tax efficiency.

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Answered on 4/27/04, 12:56 pm
Stephen Loeb Law Office of Stephen R. Loeb

Re: Getting paid as an LLC

The answer specifically depends on the nature of the agreement you have with the company. Whether or not the agreement can be construed as a formal contract, and if so the terms of the contract. If there is no contract, you cannot force a company to do business with an entity it chooses not to. If there is an enforceable contract, you can point out that failure to pay on the contract may put the company in breach and your LLC can sue the company for damages as a result of their breach.

Should you like to discuss this or any other legal matter, you can call my office to schedule an appointment for a consultation or in the alternative, I can be reached for on-phone low-cost legal consultation at 1-800-275-5336 x0233699.

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Answered on 4/27/04, 4:58 pm


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