Legal Question in Business Law in Washington

None. If you are an owner (whether stockholder, LLC member, partnership partner, whatever), you do not need to pay yourself.

I cannot say, "Naturally, no pay = no 1040 income etc." You do not say whether you have a C corp or an S corp. If an S corp, any profit the company has will pass through and be taxable to you (including FICA). That's net profit, though, so if the company is paying off debts, you might not have profit. If your corporation is a C corp, there is no taxable income to you even if the corporation makes a profit, but the corporation would then have taxable income. However, I assume you have been reporting your net operating loss.

So here is an even shorter and better answer: You do not need to pay yourself. But talk with your tax accountant to be sure that you get no surprises and that you are handling your tax reporting correctly, so that you do not lose any write-offs.

The other attorney is right on point here. If you work for your corporation without pay, that's your choice. The only one who could complain, for example, not being paid minimum wage, is you. Consult with a good business attorney and CPA in your area for specific advice.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney