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View Full Version : partners skimming off the top and keeping partial tax info from me, TX



butch2772
09-26-2013, 01:37 PM
I bought into a salon (25%) that i previously worked for nearly 3 years back in November with the goal to purchase 100% outright after the contract (1 year) has expired. Since working with these 2 partners I have not had the full cooperation from said partners as per the contract that was written. I have to beg and plead to get them to deliver products that have run out at the store, my name was supposed to be put on the lease and has yet to happen, and took them nearly 6 months to get me bank account information which was also in the contract. I was guaranteed 60% commission for my work as well as my share stake (25%). Lately they have been telling me that i owe them due to an error made on their part which in turn is keeping me from paying my investor. It was at this point that I requested all tax information from the company's CPA and fiduciary officer. This was back in June, and since then I have some how managed to piss my partners off which sounds very weird since it is in the contract that any member can view all tax information. I have hired a lawyer to send them a letter to hand over all paperwork that we asked for and also hired my own CPA for my LLC to review. I have also noticed that lately when i look over my pay stubs on our company's payroll system, i am no longer able to go further than 6 months which I was initially able to. I have also seen that in the 6 months of stubs I was able to acquire that there has been money missing from my paycheck ranging from 5-20$ at a time. Basically my pay stub not matching payroll when being sent to the accountant. My biggest issue is the lack of money for assets (Lawyer/CPA) since it is coming out of my pocket. In a recent meeting with our CPA's, one of the partners, myself and my husband, things got a little dicey as my husband defended my work ethic compared to theirs. The owner shouted at my husband (not a small guy by any means) for calling him out on his errors which in turn angered my husband. Nothing happened however, he said that in future meeting my husband is no longer allowed to attend. Can he even do that? any help would be greatly appreciated!

nealrm
09-26-2013, 07:21 PM
This whole thing sounds a little screwy. To summarize, they are holding onto 40% of your sales as your contribution towards overhead. I am assuming they are also contributing 40%. After all expenses are paid, you get 25% of the profit. In addition, the company accountant is being told you are paid $5-$20 more than the amount on the paycheck. How can the account balance the books at the end of the month? For example, he would be looking for a payroll check of $100 but would only be able to find one for $95. Who is issuing the paychecks? Generally they are printed by the account and then signed by a partner.

As an owner, you should have purchase authority. So why are you needing to ask them to get supplies. Purchase the supplies and have them billing to the company. The accountant will send the check.

Last you husband shouldn't be at the meeting. If he is, he should be quit. This is a matter between the owners of the LLC and he isn't one them. His role is strictly moral support for you.

Freelancier
09-27-2013, 08:10 AM
Welcome to "Divorce, Corporate Style". If you are discussing work ethic in a meeting with CPAs, you're already on the path to a divorce from your partners.

As with any divorce, you have to consider:

1. Are you ready to be on your own?
2. Are you financially able to be on your own?
3. Are you willing to let go of your assets in exchange for cash (never a promissory note if you think something is funny with the books)?
4. Can you reconcile with your partners if that feels like the better option? What will you need to do, what will they need to do?

If your husband is a partner of the investing LLC, he has a right to be there... otherwise, he's there as eye candy and needs to be quiet. But he also needs to be clear on the point of the meeting and keep to the point and not get distracted trying to defend anyone's honor. That's not his role as a partner in an LLC. If he can't do that, he needs to be left outside for you to consult (if you need).

Business Attorney
09-27-2013, 03:54 PM
... I have hired a lawyer to send them a letter to hand over all paperwork that we asked for and also hired my own CPA for my LLC to review. ...

Personally, I think your questions are ones you should be discussing with your lawyer, not with strangers on a forum. This is a messy situation and you need a solid strategy for dealing with it. You also need to decide whether the current situation makes the whole transaction questionable or whether this is just an interim problem of dealing with the sellers while you are both in the picture.

If I were you, I would look carefully at the fundamentals. If your partners are lying and cheating now, how confident are you that the information they shared when you negotiated your deal can be trusted? Since you worked 3 years in the business, maybe your personal knowledge of the customers, revenues and expenses are good enough that you know that your deal is still a good one. I would just double check everything to be certain.

By the way, if the problems continue, it may be a good thing that they have not put your name on the lease yet.

Jeff_B
10-02-2013, 12:52 PM
any advice you receive on this forum may not apply, You'll want to go over (A) Your articles of incorporation that states who owns what and or (B) your contract pertaining to your partnership as both of these play a huge role in what your next step should be, your attorney should be the person advising you.
Sorry for not being more helpful!

Osprey
10-08-2013, 09:30 PM
I bought into a salon (25%) that i previously worked for nearly 3 years back in November with the goal to purchase 100% outright after the contract (1 year) has expired. Since working with these 2 partners I have not had the full cooperation from said partners as per the contract that was written. I have to beg and plead to get them to deliver products that have run out at the store, my name was supposed to be put on the lease and has yet to happen, and took them nearly 6 months to get me bank account information which was also in the contract. I was guaranteed 60% commission for my work as well as my share stake (25%). Lately they have been telling me that i owe them due to an error made on their part which in turn is keeping me from paying my investor. It was at this point that I requested all tax information from the company's CPA and fiduciary officer. This was back in June, and since then I have some how managed to piss my partners off which sounds very weird since it is in the contract that any member can view all tax information. I have hired a lawyer to send them a letter to hand over all paperwork that we asked for and also hired my own CPA for my LLC to review. I have also noticed that lately when i look over my pay stubs on our company's payroll system, i am no longer able to go further than 6 months which I was initially able to. I have also seen that in the 6 months of stubs I was able to acquire that there has been money missing from my paycheck ranging from 5-20$ at a time. Basically my pay stub not matching payroll when being sent to the accountant. My biggest issue is the lack of money for assets (Lawyer/CPA) since it is coming out of my pocket. In a recent meeting with our CPA's, one of the partners, myself and my husband, things got a little dicey as my husband defended my work ethic compared to theirs. The owner shouted at my husband (not a small guy by any means) for calling him out on his errors which in turn angered my husband. Nothing happened however, he said that in future meeting my husband is no longer allowed to attend. Can he even do that? any help would be greatly appreciated!

You're in kind of a mess there. I would try to set up a meeting (without your husband) and figure this out. Put all your grievances on paper, set time lines for them to be completed and try to work them out.

If you are using a payroll company, they cannot hide the data from you. Call the payroll company and get the information. It may have already been archived. But there is no way a business owner can tell a payroll company to delete or change records.

If you feel fraud is involved - get your lawyer on it. They dominate in those types of situations where you have a moral and legal right and someone is trying to defraud you.