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We signed a contract with an accountant that ended up not doing a heck of a
lot for the money we paid her. The contract really was with her LLC, but
she's the only member and does all the work. There is no distinction
between her and the company. She has no employees.
Some time ago, we mutually decided to terminate the agreement, with her
recognizing (verbally and in writing) that she owes us a refund for at least
part of the money we paid her. However, she is being extremely difficult to
work with and it's clear to us she is not acting in good faith.
What are our options? We understand the protection LLCs provide, but can
people, especially sole members, just rip-off other people and then hide
behind the LLC? Does the fact that her and her LLC are one and the same
mean anything? Are LLCs the kind of protection that lets crooks do their
damage without worries?
Since she has completely cut-off communication with us, we see ourselves
with no other option but to sue her and will be including both her and the
LLC as defendants. Any comments on this course of action?
Thank you very, very much in advanced.
Ripped-off in Orlando, FL
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What are our options? We understand the protection LLCs provide, but can
people, especially sole members, just rip-off other people and then hide
behind the LLC?
If your contract was with the LLC, have you considered suing the LLC?
Does the fact that her and her LLC are one and the same
mean anything?
They are *not* "one and the same". An LLC is a distinct, legally separate
entity from its members, even if there is only one member.
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We signed a contract with an accountant that ended up not doing a heck of a
lot for the money we paid her. The contract really was with her LLC, but
she's the only member and does all the work. There is no distinction
between her and the company. She has no employees.
Some time ago, we mutually decided to terminate the agreement, with her
recognizing (verbally and in writing) that she owes us a refund for at least
part of the money we paid her. However, she is being extremely difficult to
work with and it's clear to us she is not acting in good faith.
What are our options? We understand the protection LLCs provide, but can
people, especially sole members, just rip-off other people and then hide
behind the LLC? Does the fact that her and her LLC are one and the same
mean anything? Are LLCs the kind of protection that lets crooks do their
damage without worries?
Since she has completely cut-off communication with us, we see ourselves
with no other option but to sue her and will be including both her and the
LLC as defendants. Any comments on this course of action?
Thank you very, very much in advanced.
Ripped-off in Orlando, FL
If she is a CPA, then file a complaint with the Florida Board of
Accountancy, which licenses and regulates CPA's. Some states also
regulate certain non-CPA accountants, but I am not sure about Florida.
http://www.myflorida.com/dbpr/dbpr/le_portal/dbpr-0070-1.pdf
If you have attorney who will file the lawsuit, I would assume that
he/she would know whether you can sue the LLC owner personally,
especially since many law firms are organized as LLC's.
I am not sure why you think it should be easier to sue an individual
who has a sole-proprietorship, rather than a corporation. The purpose
of the LLC is really to simplify the accounting and reduce the cost of
setting up a business. If it were not for LLC's, most sole-proprietors
would probably just go through the extra expense of setting up a
Subchapter-S corporation, which provides similar protection for
individuals as a regular corporation.
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Lordy wrote:
We signed a contract with an accountant that ended up not doing
a heck of a lot for the money we paid her. The contract really
was with her LLC, but she's the only member and does all the
work. There is no distinction between her and the company.
She has no employees.
Some time ago, we mutually decided to terminate the agreement,
with her recognizing (verbally and in writing) that she owes us
a refund for at least part of the money we paid her. However,
she is being extremely difficult to work with and it's clear to
us she is not acting in good faith.
What are our options? We understand the protection LLCs
provide, but can people, especially sole members, just rip-off
other people and then hide behind the LLC? Does the fact that
her and her LLC are one and the same mean anything? Are LLCs
the kind of protection that lets crooks do their damage without
worries?
First of all, if the LLC owes you money and it has any money, you can
get to it. If it owes you money but it has no money because it paid
out what it had to its shareholders, you can get it back.
In addition, if the refund is due to the CPA's negligence, she cannot
shield her personal negligence, even professionally, from liability
through the means of an LLC.
Since she has completely cut-off communication with us, we see
ourselves with no other option but to sue her and will be
including both her and the LLC as defendants. Any comments on
this course of action?
That's exactly what you should do. And let the judge decide if you
should be paid by her, the LLC or both.
Stu
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