Does a C-corp have to pay salary to the sole owner who works full-time?

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

Does a C-corp have to pay salary to the sole owner who works full-time?

A person is the only owner, director, and officer of a startup C-corp. He is working full-time on the business and the profits are growing. The owner doesn’t want to take any money out of the company at the startup stage. Is it legal for the C-corp to retain all profits and not pay any salary or dividend to the owner for a few years?In otherwords, is a sole owner of a startup subject to minimum wage? requirements?

Asked on May 21, 2013 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

No, an owner of a company is not subject to minimum wage requirements so long as he is not treated as an employee of the company (i.e. there should be no withholding; no health insurance through the company; etc.). Corporations do not have to employ anyone (even people who do work do not necessarily have to be considered or treated as employees), and only employees are subject to minimum wage.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption