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Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 2344
Experience:  Helping you with your legal questions.
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I started a vending machine business with a partner in Feb.

Customer Question

I started a vending machine business with a partner in Feb. 2014. We took in another partner later that year. We had an operating agreement drawn up from a reputable business attorney. My first partner was President and I was Secretary according to the agreement. By September of 2015 I became totally fed up with performing all the work. That included filling most all 30 machines, which were spread out up to 50 miles from my home, on a weekly basis, working usually 7 days a week. I also did all the ordering and pick up of product, new machine installs and moving machines between locations including repairs. I also collected and deposited all the money. The other two did very little.
According to our Operating Agreement one of us could leave the business and forfeit all assets and liabilities. I took that option due to the fact that they were just not going to help with the routine daily operations of the business.
Soon after I left the business, they closed it down.
So here are my questions:
1. Should I get a K-1 for the 9 months of the year I was with the business? I've tried to get one for my 2015 taxes but was told the president did not include me in the taxes for that year. I'm sure there was a huge write off for the two of them, otherwise I'm sure they would have included me. Did I also give up anything to do with taxes.
2. In the beginning my first partner and I took out a SBA loan through Wells Fargo for $10,000. Now the government is garnishing my Social Security until the balance of over $9,000 is paid. Is this a liability that wouldn't be covered by our agreement because it's govt backed? Do I have any options on handling this?
3. I made a big mistake by purchasing a company vehicle in my name and the business name. I voluntarly turned in the vehicle and am in collections for about $4,000. I did that because I couldn't trust them to deal with it appropriately after I left and could have ended up much worse off. So I took the hit to minimize the damage. Not concerned with trying to recoup that money. Just providing you with information.
Thank you
Randy
Submitted: 22 days ago.
Category: Business Law
Expert:  Damien Bosco replied 22 days ago.

Hello. My name is***** am an attorney. I will review your question. I may need to clarify facts first. I will answer & we can discuss issues.

Expert:  Damien Bosco replied 22 days ago.

You have many questions, so if I do not answer them all this go around, you can ask them in follow up questions. You should have gotten a k-1 prorated for the time you were a shareholder or partner. So, this could have affected your taxes (I am not a CPA but possibly you could have been entitled to some type of loss). The SBA sounds like it was personally guaranteed. Not sure how there was a garnishment without a judgement, but if the SBA is garnishing your wages, then you must have signed a personal guarantee somehow or something similar to it. In any event, not sure why you would be the only one being garnished if it was the company's debt. We can discuss more if you want to do so.

Expert:  Damien Bosco replied 20 days ago.

Hello again! Checking in to see if you need further help. Your satisfaction is my goal, and I'm happy to answer a related follow-up question you may have. If I have not answered your question completely or missed a question, please let me know and I will attempt to answer it. If you are satisfied with your answer, please provide a positive rating between 3 and 5 stars for the service I provided to you. Best regards.