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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 111567
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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What type of corporation would I need to form to keep from

Customer Question

what type of corporation would I need to form to keep from losing my social security disability income
Submitted: 1 year ago.
Category: Legal
Expert:  P. Simmons replied 1 year ago.
Hi, My name is Philip. I am an attorney with over 16 years experience. Hopefully I can help you with your legal question.
Sorry...I do not understand the question. Are you asking if by forming a corporation you can ensure SSI? Can you give context?
Customer: replied 1 year ago.
I am on SSDI and I am trying to protect them taking it away from me if I make too much money with the company I am forming....
Customer: replied 1 year ago.
I have been told that I need to incorporate to keep them from taking my SSDI from me..right now I am a sole proprietor and all proceeds flow through my personal account. I need to find out what I need to do to protect my personal assests away from the corporation
Expert:  P. Simmons replied 1 year ago.
Thank you. I will opt out and allow other experts to assist you. I wish you the best of luck.
Customer: replied 1 year ago.
Thanks
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
I am a different contributor.
Who told you that you could form a corporation to continue collecting SSDI while earning income from work?
Customer: replied 1 year ago.
I was told I could protect my personal income by forming the corporation and keep the company money separate from my personal income
Customer: replied 1 year ago.
I am not working
Customer: replied 1 year ago.
I have been on SSDI for 5 months off of work for 16 months....Can no longer do my job...I have an entity I have been running for a few years and it has only made a few hundred dollars a year after expenses. But in the last few months it has really started to grow and produce a steady income. I just want to be able to protect myself and my personal income from being lost in case the company does not survive. What corporation type would allow me to do that?
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
I do not know who told you that, because what they are suggesting would be Social Security Disability fraud if it is done to be able to keep earning income from work and still collect SSDI. It is a criminal offense which is a felony punishable by up to 10 years in federal prison to do what you are suggesting with the intent to continue to collect benefits. That is why I am asking you who told you that you could do this by you forming a company yourself (not their name obviously)?
Customer: replied 1 year ago.
Not sure if you saw the follow up reply....All I need to know is there a way to keep my personal assets separate from the company and how and what type corporation would allow that..
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Maybe our replies crossed paths, but if you read my response, what you are asking is how to commit a felony SS fraud and no attorney can advise you to do that or how to do that.
Customer: replied 1 year ago.
I am not asking how to commit fraud....I am asking what type of corporation would protect me and my personal assests...If I make too much from the corporation I understand I will loose a portion or all of my SSDI until I fall below the income requirements....That is understood I want to protect myself from losing my personal assests if the company gets sued or goes bankrupt
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Unfortunately, there is no corporation you can use to defraud SSDI. There is no type of corporation you can own that would allow you to do so. Someone else can own the corporation and you can be a shareholder and earn income from "passive income" and not from work (investment income as shareholder). If you own the corporation and are actually working for the corporation, regardless of whether or not the corporation is holding your money, it is considered that you are able to work and thus committing fraud as the income from the corporation is considered income from work.
Passive income on the other hand is investment income, such as income from rent or income from trading stocks or bonds and that income is allowed without impacting your SS.
If the corporation is in your name though as owner, that would not be permissible and would be where it would be fraud.
Customer: replied 1 year ago.
The work I do for the corporation won't violate my restrictions on working I cant lift more than 35 lbs and no sitting for more than 2 hrs. (Already cleared with SSDI)...So if the corporation does not make a profit then there is no income to disburse or can the corporation choose not to disburse the profit to shareholders and keep it in the company for a period of years then pay a disbursement?
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Okay, so if the corporation is earning the money and you are a shareholder not listed as owner/officer, then you can take disbursement as income for some and you can take other disbursements as dividends from the corporation and the board decides on payment of the dividend disbursement.
As long as you are not a board member running the corporation and are simply working for the corporation owned by someone else you can do that and as long as you report all of your income from work to SSA so they can adjust benefits accordingly you could do that.
Customer: replied 1 year ago.
from what I just read on SSA.GOV I can start my own company as long as they approve the plan...but if the corporation does not pay dividends or disburse profits but once a year how can my benefits be affected?
Expert:  Law Educator, Esq. replied 1 year ago.
Your corporation can disburse profits annually or monthly or quarterly, but dividends are passive income and should not impact the SS benefits. Wages would impact benefits as income from work. The SSA will look at disbursements from the previous year and can adjust benefits if they are found to be from work and not passive and reduce your current year benefits accordingly.