If a business is in my name but I don’t run it and the law is being broken, could I get in trouble for how it’s being ran by my dad?

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If a business is in my name but I don’t run it and the law is being broken, could I get in trouble for how it’s being ran by my dad?

I was forced to put a business in my name or get kicked out. My dad runs the business and pays all his

employees under the table. I don’t have anything to do with the business. Will I go down for any of that if

I don’t have anything to do with the business?

Asked on August 6, 2017 under Business Law, Mississippi

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, you could get in trouble if due to your ownership (e.g. say you are officially the only owner; or a majority owner, at least on paper) and/or your position withe company you are the person who logically should be responsible for payroll and payroll taxes; if so, you can be held liable for what occurs at the business, even if you in practice step back and let your father run it for you. There are certain responsibilities you cannot shirk; one of those is for payroll taxes (another is for sales tax) if your position or ownership makes you the appropriate responsible person. (For example: in an LLC, one member must be responsible for tax matters; if you are the only member--i.e. the only official owner--you are, by definition, responsible.)


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