I'm not really sure what question I'm asking but I'll word my problem to the best of my ability and maybe someone can help me understand it enough to be able to approach an attorney with the right informaiton.
I started an LLC (ABC) with two other equal parnters. One of the partners, J, owns his own company (XYZ). We recently agreed that ABC would purchase advertising leads from XYZ to take advantage of XYZ's volume discount.
For some reason, although I've been taking care of the invoices and books for ABC up to this point, J wants to pay XYZ invoices directly via ACH from ABC's deposit account himself. I'm not at all comfortable with this but I can't articulate why. It just doesn't seem right in my mind for J, who has ownership interest in both companies, to be transferring funds from one company to the other. I'm not a legal or tax expert, so I don't have a good explanation for my concern, nor do I know for sure if my concern is justified.
My question: Is my concern justified? What payment types are acceptable between two separate companies, related only by one owner? Is it ok from a legal and tax stand point for J, who has ownership interest in both companies, to be transferring funds from one company to the other to pay invoices? Would a check be ok? Manual deposit? I want to be able to provide a rational explanation on how he should or should not be handling ABC company funds.
Many Thanks!
Bookmarks