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Spark001 · Feb 19, 2008, 08:21 AM

My husband and brother-in-law now own a S-corp. The father transferred the stock to them over two years ago. However, the father still owns the building, but not the company. I also am an officer of this corp. The problem and my question is in reference to the father. Since the transfer of stock, the father has been saying that he is retiring, however, he has yet to do it. He has relinquished his credit cards and also cut his salary in half saying he is a "consultant" and that his salary will be considered "rent" on the building. Do I still have to make the father an officer of the corporation? And is he legally a employee or what exactly? He has also requested that we pay him (5) $100,000.00 draws (even though the retained earnings at his time of stock transfer was not that much). Better yet, he says when he leaves (yeah right), that we will continue to pay his wife the $600.00 "consultation fee". Is any of this legal and what can we do about it? Somehow I don't think that this practice is legal. It's a very sticky situation being a family run business. Any help or suggestions would be greatly appreciated, by the way our company is located in Florida.
Thanks for your help

excon · Feb 22, 2008, 07:28 AM

Hello Spark:

I see you haven't yet gotten an answer. I suspect it's because you really need in depth legal advice pertaining to your particular situation. This board is better for more general legal questions.

There are, however, two parts to any legal question. First; what is the law? You've asked that. The second is; what are you going to do about it? You didn't ask that.

Even if we told you absolutely that the father in law is doing something wrong or illegal, he's not going to lie down for you just because you waltz into his office and confront him by telling him that you found this stuff out on the internet... No, he's going to laugh you out of his office. You might even damage your claim... Probably will.

You're going to need a third party who can intervene on your behalf in any case, so you might as well hire a lawyer.

excon