Corporate Law Type of business set up

[joey2509]

Myslef and my partner are opening a kayak show in NJ, I think there are some inherent liabilities and would like to know which structure would insulate us best from lawsuits. Also my partner owes some back taxes to the IRS, if we are equal shareholders in the company can the IRS come after the business or will they keep a watchful eye on us?

 

[NYClex]

I am not sure what a kayak show is, but probably you would be doing best forming a Limited Liability Company (LLC). Then you would not personally be liable for any debts or judgment against the company, only the capital put into the company would be at risk.

Since the company is not existing yet, the IRS can't go after the company for the tax debt of your partner. But of course they can go after him some day and then take his part of the company.

 

[Michael Wechsler]

Originally posted by joey2509
Myslef and my partner are opening a kayak show in NJ, I think there are some inherent liabilities and would like to know which structure would insulate us best from lawsuits. Also my partner owes some back taxes to the IRS, if we are equal shareholders in the company can the IRS come after the business or will they keep a watchful eye on us?

As NYClex stated, a corporation is a separate entity. It is possible that your partner's portion of the business might be seized but it may not affect your right to do business, just whom you may have as a partner. Good luck with the boat show...