My question involves business law in the state of: SC
We have a small to mid-size car dealership, and are struggling with how to handle employees and partners relative to payroll. The business is a corporation. First of all, on the ownership side, we have two registered owners who are not directly involved in the daily operation - they are the financial backing for the business, and they oversee the business as a whole and manage the finances, payroll, and other key functions. As of now, these two are focusing on growing the business, and are receiving no compensation.
Secondly, on the operations side, we have two other owners/partners (not legally registered as owners as far as % ownership, but who operate as such in managing the operation of the business). These two oversee all of the daily operations, and the employees. They come and go as needed in the business to make sure things are getting done. They work together, and set their hours, days, and responsibilities around whatever they see is needed for the business.
Lastly, we keep ~5-6 employees who work everyday in the business at assigned hours and responsibilities. It's clear to us that we need to have these 5 as employees for payroll, taxes, etc, and we do. However, we are not sure about the two "partners". We have been paying them as employees, and paying payroll taxes, etc, but we'd rather compensate them otherwise, and not have to deal with payroll taxes. We've gotten mixed responses from accountants on which we should be doing, so by default (and out of concern for any kind of tax penalties or concerns), we have kept them on payroll. We are trying to grow the business, but this is a big strain financially.
Can anyone offer some guidance on how we can compensate these two and not have to keep up with payroll taxes. We'd like to have something that's a fair compensation for them, without draining the business.
We have a small to mid-size car dealership, and are struggling with how to handle employees and partners relative to payroll. The business is a corporation. First of all, on the ownership side, we have two registered owners who are not directly involved in the daily operation - they are the financial backing for the business, and they oversee the business as a whole and manage the finances, payroll, and other key functions. As of now, these two are focusing on growing the business, and are receiving no compensation.
Secondly, on the operations side, we have two other owners/partners (not legally registered as owners as far as % ownership, but who operate as such in managing the operation of the business). These two oversee all of the daily operations, and the employees. They come and go as needed in the business to make sure things are getting done. They work together, and set their hours, days, and responsibilities around whatever they see is needed for the business.
Lastly, we keep ~5-6 employees who work everyday in the business at assigned hours and responsibilities. It's clear to us that we need to have these 5 as employees for payroll, taxes, etc, and we do. However, we are not sure about the two "partners". We have been paying them as employees, and paying payroll taxes, etc, but we'd rather compensate them otherwise, and not have to deal with payroll taxes. We've gotten mixed responses from accountants on which we should be doing, so by default (and out of concern for any kind of tax penalties or concerns), we have kept them on payroll. We are trying to grow the business, but this is a big strain financially.
Can anyone offer some guidance on how we can compensate these two and not have to keep up with payroll taxes. We'd like to have something that's a fair compensation for them, without draining the business.
Business Finance: Does a Small Car Dealership Need to Pay Working Partners As Employees
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