Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
Is it lawful for the CEO and CFO of an S-corp to use corp funds to pay for personal expenses?
They have personal credit cards with high balances ($50k), which includes some transactions that are legitimate business purchases but mostly personal expenses, that they are making payments on with corporate funds. They want me to record the credit card transactions as marketing expenses charged to a job named "INT" (for "internal" I guess). Is this legal? Or is it embezzlement?
Yes, I know for sure that they are personal expenses. They mark each transaction with a pen on their credit card statements. Actually, I think embezzlement is when a person entrusted with corp funds uses them for personal expenses. Larceny is more along the lines of stealing.
3 Answers
- Phil RLv 51 decade ago
S-Corporations typically have small numbers of stockholders, and its likely that the CEO and CFO may actually be the stockholders. It could be considered embezzlement, if the expenses aren't approved by the appropriate means.
It is also possibly a violation of tax laws. When they are using corporation funds to pay personal expenses, they are essentially compensating themselves. If these personal expenditures weren't for business purposes, then this may be taxable income. You could, if you have proof of this, contact the IRS and let the IRS deal with the unreported personal income.
Source(s): 12 years in the legal profession. - 1 decade ago
An S-Corp is pretty much owned by the executives.
Do you have proof they're non-business related? If not, then theres a chance it may be legal. Embezzlement usually involves stealing from companies. If its your own company, stealing is kind of hard to do from your own funds.
- dlkLv 71 decade ago
No it is not legal, and if audited they would be called on it. I call it embezzlement if these are truly non business expenses.
