Comment on consultant pay / RSVP if coming to K&K Holiday Party November 23, 2024
KEN KIRSCHENBAUM, ESQ
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Comment on consultant pay / RSVP if coming to K&K Holiday Party
November 23, 2024
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Holiday Party 2024 – this is your invitation - rsvp if attending
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The K&K Holiday Party will be on December 12, 2024 in Old Westbury, NY from 6:30 to 9:30 PM. You’re invited, but you do need to RSVP before December 1, 2024 so we can properly plan. Format is casual dress, cocktails and plenty of pass-around hors d'oeuvres; you won’t leave hungry.
PLEASE SEND YOUR RSVP TO:
Kathleen Lampert at 516 747 6700 x 319 or [email protected]
OR
Amy Laveglia at 516 747 6700 x 313 or [email protected].
Come see old and meet new friends at this social event. Looking forward to seeing you at the party.
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Comment on consultant pay from article on November 12, 2024
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Ken,
Reading “Name Withheld” question from November 12 2024 in which he states
“The purchase price would be reduced by xxx dollars – thus reducing Buyer’s tax burden and the ‘consultant’ fee help our tax status. We are a ‘C’ corp. However, our CPA believes since we are paying him as a consultant over 36-months, that would be considered a loan and we would 1099 and he would have even more taxes to pay, so, not a good idea.”
I have no idea what they are trying to achieve but the fact that he states “We are a C Corp,” gives me a hint that the CPA doesn’t really understand the industry or transactional accounting. I am not sure if the Seller is also a C Corp. but there seems to be a number of moving parts that should be addressed by experienced professionals, and not by CPAs playing lawyer.
Mitch Reitman
817 698 9999 XT 101
Reitman Consulting Group
Fort Worth, TX
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Response
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It is indeed rare that it would make sense for an alarm company to be a C Corp. I have consistently recommended an S Corp election or LLC. I preference is S Corp, and I don’t want to speak for Mitch, but I think he does as well.
The problem with alarm company owners or their accountants meddling in the buy-sell deal is that invariable they complicate the transaction. Of course agreeing to everything does seem like it would smooth out the deal, but that only works if there aren’t problems throughout the deal and especially after the deal closes and Seller thinks he home free, just to be dragged back into a nightmare [defined as claims for money – a lot more money than the seller wants to give back].
The sale of your business is not something you do routinely, no matter how many businesses you have sold; it can’t be enough to run the gamete of all the ugly issues that arise in these deals. A few articles ago I warned against predator buyers and their attorneys …. well not all are nefarious, some are only “misinformed”, to be kind.
The sale of your company, or buying a company, should be a time of happiness; maybe relief; certainly not contention or anxiety. I like to keep it simple. Selling or buying ….. K&K is here to do the legal and the brokering; just give us a call. Contact Kathleen Lampert at 516 747 6700 x 319 or [email protected] or Stacy Spector,Esq at 516 747 6700 x 304 or [email protected]; or call me directly.
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