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You have the company (which you now own) pay you money, which pays off your debt, but puts the company into debt.
by ubernostrum 11y ago
You have the company (which you now own) pay you money, which pays off your debt, but puts the company into debt.
- edoloughlin 11y agoThat would seem like bad corporate governance. Why is this allowed in the case of a limited liability company? It seems like a mechanism to offload liability.
- charlesdm 11y agoOnly if the company goes under. Each business has a different level of acceptable debt. Some entrepreneurs are great at controlling a balance sheet, and can run businesses with a ton of debt (e.g. John Malone) For example: a real estate business needs to use a lot more debt than a software company.