Motorcycle.com

acecycleins · 03-03-2010, 09:11 AM

Let me preface this with a "Ken, don't worry".

One of the "original" godfather's for the motorcycle only insurance agencies and ACE are in talks to join forces. Why? 'Cause new bike sales (or lack of) has made us both stagnant and survival makes this seem feasible.
Actually, Jerry has put everyone of my competitors in business for the last 25 yrs of his business. What makes us get along so well is that I self-taught without ever asking for his assistance. That and my ability to run better customer service with less staff impresses the hell out of him.
Here's the question: Can I desolve a corporation that has unsecured creditcard debt without bankrupting the actual corporation first?

Why do I ask this? Well, our commissions are actually pretty good if you were a single employee, but it's not for two. Jerry wanted to pay for the company by allowing us to keep the ACE commissions. While this sounds wonderful- tax-wise it's not exactly great.
So I came up with the idea of "giving" him the book in exchange for paying Kim a salary (based on those very commissions) and then allowing the taxes to be taken via payroll.
To me this sounds like a wonderful idea, but I have been told that you can't desolve a corporation with exisiting debt no matter the amount.
If I can desolve the company and do what I want with "giving" the book of business to Jerry then my 2500 customers would gain a 5 person staff instead of just me and Kim. I would become an employee of Jerry's and his agency and the ACE brand would disappear (sad but true), but the combined customer base would nearly equal 6000 active policies. Those are huge numbers for an independent, single store operation. And as much as I'd miss being the "owner" I will equally not miss dealing with the headaches of being an owner.

seruzawa · 03-03-2010, 09:19 AM

Good idea Ace. Ask the clowns at MO for legal advice.

The_AirHawk · 03-03-2010, 10:07 AM

You have a PM.

acecycleins · 03-03-2010, 12:13 PM

Seru-I do this because many of us are self-employed and are successful. If I can get something answered by asking to guys that I converse with everyday then any advise is good. We may be MOrons, but were certainly not stupid.

longride · 03-03-2010, 12:48 PM

Quote:

Originally Posted by acecycleins

Seru-I do this because many of us are self-employed and are successful. If I can get something answered by asking to guys that I converse with everyday then any advise is good. We may be MOrons, but were certainly not stupid.

Sum of us heres got smarts real good!

trenttheuncatchable · 03-03-2010, 01:02 PM

Okay, I am not a business attorney (or any kind of attorney), but I would guess that you can't just dissolve a corporation (this is an LLC, right?) if it has outstanding debts. The debts transfer with the company if you sold it, and otherwise you'd have to do something like bankruptcy, or your creditors could go after you in court. That is my (admittedly very limited) understanding.

On another note: Wahoo! I got to take the bike to work today .. in the Chicago area, no less! A bit of a cold breeze on the chin, but I'm not really complaining.

acecycleins · 03-04-2010, 09:07 AM

I got Scott to help me answer a few things. Looks like I can keep the corporation active- yet, I can turn control of the book to my buddy. I let my licensing and E&O go inactive allowing the company to be dormant. Then all I have to do is leave the phone lines active with a pre-recorded message to let them know that my buddy's company will be handling the policies. That will allow me to pay the debt over time and will release him from liability of those debts.

A Star Ride · 03-04-2010, 12:51 PM

So your giving him all the new business and active clients, in return for a salary, and you have to pay off the company's existing debt yourself?

acecycleins · 03-04-2010, 01:12 PM

Quote:

Originally Posted by A Star Ride

So your giving him all the new business and active clients, in return for a salary, and you have to pay off the company's existing debt yourself?

In a "sort of" kinda way. The point is that J and I need to join forces to allow survival. His company is 25yrs old and has no debt (to speak of). Mine has credit card debt that is higher than the projected commisions for 2010. Kim has to personally bankrupt (it's all in my sister's name- ya'll try doing that with your sisters. betcha can't). We need to desolve the company, but those cards obviously won't allow it without payment in full. Well, both J and I don't have that type of cash handy. So, trying to make one company disapear without it effecting the tax and debt situation of the other is tricky. But if I keep the ACE part alive for the debt purposes I can pay the debt over time.
That's my theory, anyway. But what the hell do I know about the law.

seruzawa · 03-04-2010, 01:14 PM

Laws differ from state to state. You better get some real advice before you screw yourself up.

03-03-2010, 09:11 AM	#1
acecycleins Founding Member Join Date: Jun 2007 Location: North Georgia Posts: 4,125	Need a Legal question answered Let me preface this with a "Ken, don't worry". One of the "original" godfather's for the motorcycle only insurance agencies and ACE are in talks to join forces. Why? 'Cause new bike sales (or lack of) has made us both stagnant and survival makes this seem feasible. Actually, Jerry has put everyone of my competitors in business for the last 25 yrs of his business. What makes us get along so well is that I self-taught without ever asking for his assistance. That and my ability to run better customer service with less staff impresses the hell out of him. Here's the question: Can I desolve a corporation that has unsecured creditcard debt without bankrupting the actual corporation first? Why do I ask this? Well, our commissions are actually pretty good if you were a single employee, but it's not for two. Jerry wanted to pay for the company by allowing us to keep the ACE commissions. While this sounds wonderful- tax-wise it's not exactly great. So I came up with the idea of "giving" him the book in exchange for paying Kim a salary (based on those very commissions) and then allowing the taxes to be taken via payroll. To me this sounds like a wonderful idea, but I have been told that you can't desolve a corporation with exisiting debt no matter the amount. If I can desolve the company and do what I want with "giving" the book of business to Jerry then my 2500 customers would gain a 5 person staff instead of just me and Kim. I would become an employee of Jerry's and his agency and the ACE brand would disappear (sad but true), but the combined customer base would nearly equal 6000 active policies. Those are huge numbers for an independent, single store operation. And as much as I'd miss being the "owner" I will equally not miss dealing with the headaches of being an owner. __________________ "Slack" - a state of being in which everything flows smoothly.....a frame of mind so at ease that the universe naturally cooperates.

03-03-2010, 09:19 AM	#2
seruzawa Robby Join Date: Nov 2001 Location: 8501 ft. Posts: 16,803	Good idea Ace. Ask the clowns at MO for legal advice. __________________ I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched c-beams glitter in the dark near the Tanhauser Gate. All those moments will be lost in time, like tears in the rain.

03-03-2010, 10:07 AM	#3
The_AirHawk Founding Member Join Date: Jun 2007 Location: Livin' in a Van: down by the Mariana Trench Posts: 10,891	You have a PM. __________________ *Parfois, on fait pas semblant* Sometimes, it's not pretend Oderint Dum Metuant Let them hate so long as they fear политики предпочитают безоружных крестьян Politicians Prefer Unarmed Peasants Nothing to see here, Citizen. Move along now...

03-03-2010, 12:13 PM	#4
acecycleins Founding Member Join Date: Jun 2007 Location: North Georgia Posts: 4,125	Seru-I do this because many of us are self-employed and are successful. If I can get something answered by asking to guys that I converse with everyday then any advise is good. We may be MOrons, but were certainly not stupid. __________________ "Slack" - a state of being in which everything flows smoothly.....a frame of mind so at ease that the universe naturally cooperates.

03-04-2010, 09:07 AM	#7
acecycleins Founding Member Join Date: Jun 2007 Location: North Georgia Posts: 4,125	I got Scott to help me answer a few things. Looks like I can keep the corporation active- yet, I can turn control of the book to my buddy. I let my licensing and E&O go inactive allowing the company to be dormant. Then all I have to do is leave the phone lines active with a pre-recorded message to let them know that my buddy's company will be handling the policies. That will allow me to pay the debt over time and will release him from liability of those debts. __________________ "Slack" - a state of being in which everything flows smoothly.....a frame of mind so at ease that the universe naturally cooperates.

Sponsored Links	Remove Advertisements
Motorcycle Forum Advertisement

03-03-2010, 01:02 PM	#6
trenttheuncatchable Founding Member Join Date: Jun 2007 Posts: 834	Okay, I am not a business attorney (or any kind of attorney), but I would guess that you can't just dissolve a corporation (this is an LLC, right?) if it has outstanding debts. The debts transfer with the company if you sold it, and otherwise you'd have to do something like bankruptcy, or your creditors could go after you in court. That is my (admittedly very limited) understanding. On another note: Wahoo! I got to take the bike to work today .. in the Chicago area, no less! A bit of a cold breeze on the chin, but I'm not really complaining.

03-04-2010, 12:51 PM	#8
A Star Ride Registered Member Join Date: Oct 2009 Location: central Va Posts: 1,126	So your giving him all the new business and active clients, in return for a salary, and you have to pay off the company's existing debt yourself? __________________ White Trash Hick from Appalachia

03-04-2010, 01:14 PM	#10
seruzawa Robby Join Date: Nov 2001 Location: 8501 ft. Posts: 16,803	Laws differ from state to state. You better get some real advice before you screw yourself up. __________________ I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched c-beams glitter in the dark near the Tanhauser Gate. All those moments will be lost in time, like tears in the rain.