Wednesday, March 28, 2012

Limited Liability?

Q.  I loaned my sister some money last year to help her get started in her business. My main concern is protecting my family from liability. I understand we may need a LLC or Corporation. Can you help with tax returns? What is our best course of action?

A.  Unless you formed your corporation or LLC and ran your business through them last year, most likely you operated as either a loosely formed partnership, or your sister ran her business as a sole proprietor. I can't give legal advice, but it is too late to do anything after-the-fact. My best advice is to seek legal counsel immediately in the state your sister operated her business, find out what you can do legally, then get your books in order. You really can't prepare tax returns until all the above is accomplished.

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