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I convinced my investors ( around 5) about a year ago to…

I convinced my investors (...
I convinced my investors ( around 5) about a year ago to invest around 200k in my business, but the profits where not enough to cover the interest to pay back
Nothing on paper
I’m assuming responsibility filing chapter 13
Can they make a case against me ?
I have nothing, I’m broke
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Answered in 10 minutes by:
3/9/2018
LegalDan
LegalDan, Attorney
Category: Business Law
Satisfied Customers: 616
Experience: Partner at McCollum Hodgkinson, P.C.
Verified

Hello my name is ***** ***** I am happy to help - when you convinced them to invest were they named as investors in the articles of incorporation? Did you personally guarantee any of the loans to the business? Did you ever use personal funds for business purposes?

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Customer reply replied 4 months ago
2 of them I put them as vps on January 1 /2018 assuming they will help me with the company expenses , but they withdraw recently because they just want the profit and not cover expenses, so I remove them when I renew the company information (annual report)
Customer reply replied 4 months ago
No everything was verbal and yes I use my personal credit cards for the business

When you say personal credit cards to you mean debit card linked to personal account or a VISA under your personal name?

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Customer reply replied 4 months ago
Visa under my name and Amex too
Customer reply replied 4 months ago
Sometimes the investors go with me and purchase the merchandise for me with their credit cards

None of the loans you took were personally guaranteed correct? Your house or other assets weren't put up as collateral correct?

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Customer reply replied 4 months ago
Ex sams club under my membership business they buy a full truck and I will resale it to the supermarkets
Customer reply replied 4 months ago
I have no house , nothing right now , I’m broke
Customer reply replied 4 months ago
I owe my car , I have a 401 k for just 14k
And life insurance for $1000000.00
Customer reply replied 4 months ago
I have 3 cash advances total around 60k they are personal guaranteed

Cash advances for the business? But the loans were not personally guaranteed correct?

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Okay - thank you for all the information - to answer your question, the investors can not come after you personally for the money that they invested into the business. It does not sound like you personally guaranteed any of the loans to the business, nor is there anything in the articles of incorporation. Also, it does not sound like you commingled funds between personal checking accounts and business accounts. To make a case against you personally, they would need to "pierce the corporate veil" and show there was basically no difference between your personal account and the business account. It does not sound like its the case. The only think a bankruptcy may not cure is the 60k advances that are personally guaranteed.

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I hope that this answered your question.

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Customer reply replied 4 months ago
Thank you

You are very welcome, can you please rate me with 5 stars

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Customer reply replied 4 months ago
Of course , where?

There is a 5 star rating system - i believe it is on the left side of your screen

LegalDan
LegalDan, Attorney
Category: Business Law
Satisfied Customers: 616
Experience: Partner at McCollum Hodgkinson, P.C.
Verified
LegalDan and 87 other Business Law Specialists are ready to help you
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Customer reply replied 4 months ago
How they can prove I commingled funds
I use personal credit cards to buy inventory for the business
Customer reply replied 4 months ago
If I close my actual company and I do chapter 13 , after that can I open another business?

Its very difficult to prove that - and yes, you can open as many as you like.

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Customer reply replied 4 months ago
Can I close a corporation if I have debts?
Customer reply replied 4 months ago
If I have debts , I have to file bankruptcy?
In Florida

I am only allowed to answer one question at a time - you can request me personally and I will continue to answer your questions.

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Customer reply replied 4 months ago
How?

save me as your favorite expert and then you can personally send me questions. Accept this answer and you will be allowed to save me

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Category: Business Law
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