How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 116716
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
Type Your Business Law Question Here...
Law Educator, Esq. is online now
A new question is answered every 9 seconds

My son bought an airbrush business for which he left the name

This answer was rated:

My son bought an airbrush business for which he left the name as it was, paying the ex owner a thousand dollars a month. When filling taxes he does the business as a DBA under the owners Inc, is this legal? He has been in the business for almost a year now and the IRS is saying he cannot do this any longer. The business is struggling to stay afloat, but the ex owner had let my son use his accounts to purchase supplies, my son can't pay those bills, now the owner pulled the plug and won't allow him to use the accounts to purchase inventory, etc and he can't get a line of credit for at least 4 more months! What should he do?
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

I am afraid that he cannot work under some other party's DBA. He can switch the company over to his name, since he purchased the company and he would have to obtain his own EIN number from the IRS and file taxes under his own EIN.

If he had a contract with the former owner, even a verbal contract, then both your son and the former owner must honor that contract I am afraid, which means your son has to pay his bills and if he does not the owner can shut him down and can sue your son for all money he owes.

Your son has an option of filing for bankruptcy, which would extinguish those debts to the former owner and everyone else he owes. If your son does not file for bankruptcy for whatever reason, his only other option I am afraid is to negotiate some deal with the former owner or come up with some investors in his business who can put up some money for a share of any profits when he finally starts to make money. These are his options.

Thank you so much for using I truly aim to please you as a customer, but please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. PLEASE use REPLY to EXPERT if you would like more information or if you feel something was not included in your answer.

Kindly remember the ONLY WAY experts receive any credit at all for spending time with customers is if you click on OK, GOOD or EXCELLENT SERVICE even though you have made a deposit or are a subscription customer. YOU MUST COMPLETE THE RATING FOR THE EXPERT TO RECEIVE ANY CREDIT, if not the site keeps your money on deposit.

Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.

Law Educator, Esq. and other Business Law Specialists are ready to help you