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I'm 100% of the company and get a 1099 cali

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  • I'm 100% of the company and get a 1099 cali

    I wanted to start a company and had one investor that new what I could do and how fast I can turn money over. She puts in $$40,000. so we have an S corp. Well she does. She put the name 100% under her name. At the first meeting we will deside the shares. I am the company 100%. She put 40,000 in for an investment. in 1 year I over doubled her money. she never gave e any shares like she said and the wants to sell me shares to get in the company. the same company I built from ground up. she paid me my profit through the year. then she sent me a 1099 as a private contractor..... that is weak and I want to take action..
    What do I do about the 1099??? I should not have been 1099 and she didn't take out any taxes from it.

  • #2
    It sounds as if the owner of the corporation is paying you for your entrepreneural talents with a paycheck instead of company shares. As the entrepreneur, your payments are purely the profits, which are not regular wages.
    Sure, the company might have been your idea....and although you say you are '100% of the company', the S corp charter and that $40 K investment says differently.
    If you think you deserve shares of the company, you need to determine how much your capital investment (entrepreneur) is worth to the company, above what you have already been paid.

    If you have any expectations of shares of the corp, or any other participation, be sure to get the owner's promises on paper.
    "What would a reasonable person do?"

    aryels
    A.S. Paralegal
    Criminal Justice Student--B.S.

    "Give this guy 15 cents and tell him to go to hell."

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