Come hard times for the business, those mistakes eat into our options for the owners survival when the corporation goes down.
- the vendor accounts remain in the name of the proprietor,
- the stock may not have been issued, and
- it’s unclear whether there was an explicit transfer of the assets to the corporation.
If the business is beyond saving, I want the incorporated business to go out of business. The business can shut down either through a bankruptcy filing or just by closing the door.
The goal is to let the corporation die without killing the owner in the process.
That requires as much distinction between the assets and debts of the business and the assets and debts of the business owner as possible.
Yet when the incorporation was sloppily done, that line between owner and business may be murky.
Owner still needs to eat
The challenge when a small business fails is making sure that the owner has a way to make a living after the doors close. [Read more…]