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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 114135
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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My father and i just set up a LLC with him as the only member

Customer Question

My father and i just set up a LLC with him as the only member and me as an officer, i have some financial problems and may have to file bankruptcy so i was kept off. If i did file for chap 7 how would that affect my financially if i was a member of the new business? Since i will be running the business and when its time to file taxes can i claim all the revenue as my own and leave my father out of it?
Submitted: 5 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 5 years ago.
If you are not an actual member and just an officer then there would be no impact on the business. However, if you are a member, that would be an asset for you to claim in the bankruptcy and creditors can attach your interest in the LLC for payment. If you are an officer, then you would get a pay from the business and they could only garnish your wages.

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Customer: replied 5 years ago.
you only answered part of the question, i also wanted to know about the ...well please read my last post regarding the tax implication for my father and if i can claim the income and keep him out of the tax liability aspect of the business even though he is legally the only member on the llc.
Expert:  Law Educator, Esq. replied 5 years ago.
As an officer and not a member, no you cannot take all of the tax liability unless you are claiming all of the profits as salary and bonus from the LLC and then your father would have zero proceeds from the LLC to declare on his personal taxes (as the LLC is a flow through tax entity and the MEMBERS claim profits and losses on their personal tax returns).
Customer: replied 5 years ago.
Just so I am clear... if I claim all the revenue that comes through the business as I will be the only employee, my father will have nothing to file pertaining to the llc since u claimed it all? Ia that correct?
Expert:  Law Educator, Esq. replied 5 years ago.
Your father would file a zero amount on his personal taxes for income/losses from the membership in the LLC.
Law Educator, Esq. and 2 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
thank you
Expert:  Law Educator, Esq. replied 5 years ago.
Thank you.