owning a business

April 15th, 2011 by Questions

I have a business that is in my wifes name. I take a paycheck from that business. I know that my personel paycheck will be taken into consideration but what happens with extra money that is in the business account? can they go after that money.
The business is in my wifes name (only) legally. I go out and make the money.. it goes into the business account and then she pays me from the business.. We need money to run the business.. but I am concerned because it is my “Spouse” who ownes the business. Thanks for your time

Posted from: Ontario


One Response to “owning a business”

, A licensed trustee said:

The final decision about how to handle this business will be up to your trustee, but it is likely that any profit that is retained in the business will be added to the household income for the purposes of determining your surplus income payments.

The reasoning goes like this, you “are the business” (you said you generate all the work, your spouse simply owns the business). The “substance” of the business is that it is yours (or rather you). The legal “form” makes it your wife’s, but bankurptcy law is more interested in substance than form. Otherwise people might get “clever” in the ways they arrange their finacial affairs.

Discuss this with whatever trustee you see BEFORE you file.

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