Business type - income & support payments

[randomjohndoe]

I am a judge. I learn about this.

I'm very curious how do you learn who owns the corp in Costa Rica?

[FaithandMorals]

I'm very curious how do you learn who owns the corp in Costa Rica?

Of course irl I am not a judge. I mean this as hypothetical.
I would say I would find out very easily once the financial statement is completed by the OP. Where is the money coming from? The ex or their lawyer has a field day with it.
Or, maybe they could get away with it. As I said before, if they do, good luck to them as they are braver than I.
I would say though if they do get away with that and do not get found out, maybe they hide something else in their case and this does get found out.
If I had to bet, I would bet judges have just about seen it all and are not dumb....

[sahibjee]

the TechCo will be providing online services. so it could be all started offshore without a problem. however there are another couple of things with the whole offshore idea.

1- the services will be provided here in Canada with some hardware equipment (i.e. computer etc) being under ownership of TechCo therefore requiring at least TechCo to be registered here. unless we somehow manage to get the clients to buy their own equipment by structuring the services a bit differently.

2- the charities that i intend to donate to are all here in canada. so the accounts would have to be here. or an alternative way will have to be found to bring money in. i think with that the ice gets really thin. specially when the money is not going straight to charities, first the money is buying franchises and then the income from those franchises is going to the charities.

HammerDad you mentioned that its a better idea to wait until after divorce to start the company, how does it make a difference if its done post separation but pre-divorce? my ex-Lawyer said some thing on the similar lines i.e. "its not time to start businesses, its time to deplete your assets"
but my understanding is that if any split of assets has to happen it would be valued at the date we separated not after right?

[randomjohndoe]

I would say I would find out very easily once the financial statement is completed by the OP. Where is the money coming from? The ex or their lawyer has a field day with it.

There is no mentioning of the off.co. in the financial statement. What can you learn from it? Money is coming from customers, by the way. The proper question is where they are going

[HammerDad]

The biggest issue for OP is that he lives in Canada/Ontario and would be an agent/representative/employee of the Corporation, and thus the corporation would 100% be required to register in, at very least, Ontario. There is simply no way around it. His presense in Ontario falls under "carrying on business".

The second issue for OP is he discloses to the court that he is an employee of techco. Who are the directors and officers of techco? A profile report obtained from the home jurisdiction would show that. Some jurisdictions require shareholder information even for non-public corporations. If the profile doesn't show who the shareholders are a court can order that such information be disclosed.

So lets say he uses Grampa as the director and the Holdco as the shareholder. A profile report reflects that his retired grampa is the director and an offshore corporation whose home jurisdiction is a tax haven (Caymans, Costa Rica etc) is the shareholder. A search obtained on the Holdco shows that grampa is the director and/or shareholder of that (or possibly OP if he doesn't want to risk someone walking away with his company).

Yeah, Grampa is the director/officer and takes on that risk. However, grampa's background isn't anywhere near that field. The only person associated with the corporation that does have that background is OP. Even a half sober/competent/awake judge will be able to see through this arrangement and pin the business back on OP.

Again, off shore corporations in tax shelter jurisdictions are great for tax purposes. However, given the amount of discretion a judge is provided, and given the fact that they aren't generally stupid people, I personally wouldn't want to spend the amount of money required to establish this structure only to have to fight a huge legal battle to justify it and then possibly lose anyway.

I suggest waiting until after the divorce as the ex's argument that any income derived from it becomes weaker. Notwithstanding that, you aren't obligated to show a real profit it from it for sometime. So lets say you incorporate 5 months post divorce and start carring on business. 2.5 years later you start to show a health proft. Your ex's argument for increase SS due to the new business is weak as the her standard of living when you were together is being maintained by the existing amount of SS. The ex hasn't been disadvantaged, they never participated in benefits of the corporation in the first place and never contributed themselves personally (either financially or through some other form of support). She shouldn't be entitled to increased SS because you had a great idea post divorce. Any monies that would be transfered would be a wealth transfer.

The only reason I can see that would cause the ex to participate in profits post divorce (outside of CS, which I won't help someone try to get around) is if OP made $500k a year throughout the marriage. They go to get divorced, his income drops to $75k all the sudden. Then 3 years later his income is back up to $500k per year. The standard of living the ex was used to (and I feel like puking for saying this, as I don't agree with the train of thought) is on the higher amount. And a judge could see that the lower amount was just an attempt to decrease ones income to avoid paying support and increase the amounts to amount they were used to prior to divorce.

[randomjohndoe]

The biggest issue for OP is that he lives in Canada/Ontario and would be an agent/representative/employee of the Corporation, and thus the corporation would 100% be required to register in, at very least, Ontario. There is simply no way around it. His presense in Ontario falls under "carrying on business".

Well technically that would be obligation of the corp, what does it have to do with the OP? So the corp did not register, go find its owners and speak to them.

So lets say he uses Grampa as the director and the Holdco as the shareholder. A profile report reflects that his retired grampa is the director and an offshore corporation whose home jurisdiction is a tax haven (Caymans, Costa Rica etc) is the shareholder. A search obtained on the Holdco shows that grampa is the director and/or shareholder of that (or possibly OP if he doesn't want to risk someone walking away with his company).

So I understand that it is possible to find out who the owners of the offshore are? Exactly what does it take?

[HammerDad]

Well technically that would be obligation of the corp, what does it have to do with the OP? So the corp did not register, go find its owners and speak to them.

But as I mentioned. This wouldn't an issue until it becomes one. If the corporation ends up in court, it wouldn't be able to maintain the action until registered.

So I understand that it is possible to find out who the owners of the offshore are? Exactly what does it take?

How depends on the jurisdiction.

[FaithandMorals]

Well technically that would be obligation of the corp, what does it have to do with the OP? So the corp did not register, go find its owners and speak to them.


So I understand that it is possible to find out who the owners of the offshore are? Exactly what does it take?

I think the answer to this was best summed up by Standing on sidelines John Doe when they posted to one of your first posts.

"geesh you come on a board like this and want information on how to lie to the ex??

your best bet is to get the proper paperwork for that money. There has to be some sort of record of it from the corp that held the money.

You lie about the money, get found out and your creditabilty is shot. Why take a risk like that. Be upfront and honest. If you can prove it was premarital then you shouldnt have a problem. "

I mean c'mon. You are a new poster here and almost all of your posts seem to relate to how you might use an overseas angle to hide $17K from your ex? Why not just tell the truth?

I for one dont want to be associated or help someone looking to screw over someone they used to love. Just be fair, tell the truth and all should be fine.

[FaithandMorals]

What's more, maybe this is why you are getting divorced?

[randomjohndoe]

I mean c'mon. You are a new poster here and almost all of your posts seem to relate to how you might use an overseas angle to hide $17K from your ex? Why not just tell the truth?

I for one dont want to be associated or help someone looking to screw over someone they used to love. Just be fair, tell the truth and all should be fine.

Well you should give me at least some benefit of a doubt. You don't know me or my situation, how is it helpful to speculate like this. I am honest and upfront. And I was punished for that dearly. I really don't want to go into further details, suffice it to say that my ex is way way way better off than she was prior to the marriage. Because of me. And unlike me.

[arabian]

Faith and Morals is correct.

My take on the whole thing is - you can run but you can't hide. Forensic accounting would be ordered and the scan unearthed.

You should save yourself some money and time and stress and simply give your ex wife shares in your new corporation. If she gets something out of the deal she would be less likely to kick up a fuss in the future. But then that wouldn't feel as good as trying to screw her over would it?

[HammerDad]

You should save yourself some money and time and stress and simply give your ex wife shares in your new corporation. If she gets something out of the deal she would be less likely to kick up a fuss in the future. But then that wouldn't feel as good as trying to screw her over would it?

If he incorporates post divorce, why give her anything from the corporation that is incorporated post divorce? She made no contributions to it and as such has no interest in it. If incorporated post divorce, she would have made no financial or personal contributions to it. He would be the one putting in 100% of the risk and efforts while she reeps a % of the rewards.

Above and beyond that, why give her shares of all things? That would be the worst possible move. As a shareholder she would be entitled to certain rights. Even if the shares given to her were non-voting, there are still instances where even non-voting shares are entitled to vote. You are making someone you are divorcing a business partner....not good business practice. He may have to give her money...fine...but shares!!!?!?!? that wouldn't be one the wisest business decisions I've ever saw.....(unless he gifted her a portion of the shares and then the corporation redeemed them as a means of paying lump sum spousal support...but the corporation would have to have the money in the account to accomodate this).

Most people when they divorce want to separate their lives, not continue on in another fashion.

If they were married and the corporation existed at the time they were together, then she would be entitled to 1/2 value of the corporation. But to give her shares post divorce.....ummmm...no...

[arabian]

If my ex husband opens a new business and makes income off that business I am entitled to 50% - that is the divorce agreement I have (a formula). It would be a hell of a lot cheaper for him to give me some shares than to pay me 50% of the income he earns from the business. He didn't argue for that so I naturally kept my mouth shut. Valuation of shares is a whole topic.

I know many, many wealthy women who received shares in husband's company in addition to cash settlements. They have nothing whatsoever to do with ex. Shares just add to their portfolio and it seems to make them feel good.

I don't know where you get the idea that post-divorce income isn't of concern to ex wife. That may be the case for a marriage of short duration but for marriages where there is indefinite support, the after divorce business activities can be quite important.

Once again, all depends upon the circumstances. The dude could put the shares in a kids name. I'd recommend bending over backwards to keep the ex happy so she doesn't go on a snooping expedition. I believe you are always better to keep things simple, legal and be prepared to provide full disclosure. I've heard of ex wives receiving new cars from ex every two years. You have to determine what you can afford and what sorts of incentives would most appeal to ex.

[HammerDad]

I don't know where you get the idea that post-divorce income isn't of concern to ex wife. That may be the case for a marriage of short duration but for marriages where there is indefinite support, the after divorce business activities can be quite important.

Spousal support should be (again sorry if I vomit a little bit on my keyboard again) to keep the lifestyle of the adversely affected spouse equal to that they enjoyed during the marriage, nothing more nothing less.

If there are kids, then they should benefit from increases in income. The ex is the ex, so long as their lifestyle is maintained at a level similar to that of what they enjoyed during the marriage, should the other spouse make some great business decisions, have a profitable idea or other form of financial windfall, the ex shouldn't benefit more then what the payor spouse was previously obligated to provide.

Hypothetical - married 13-14 years. 2 kids. Both worked, Spouse A made $100k, spouse B made $25k, so spouse A pays SS to maintain spouse B's lifestyle for 6-7 years.

3-4 years Post divorce Spouse A gets a bunch of promotions, makes some great investments and income jumps to $500k. Spouse B may want a chunk of that money, but they weren't together when spouse A made these decisions and wasn't involved in the risk/financial contribution/emotional support etc etc. I can't see any reason why Spouse A should be obligated to pay more to spouse B then what they were when spouse A made $100k. Spouse B's lifestyle is similar to what it was when they were married, they have not been adversely affected.

I guess it comes to entitlement. If they are together and income jumps, the ex's entitled is established. But if they are not together, where is the entitlement (aside from a sense of entitlement). They didn't contribute. Even in life time SS instances, the amount of SS should be related to the lifestyle enjoyed during the marriage. Nothing more, nothing less. Otherwise, you end up with spouses reaping the benefits of decisions made where they had no input, support or risk, while enjoying a lifestyle they previously enjoyed.

[randomjohndoe]

It would be a hell of a lot cheaper for him to give me some shares than to pay me 50% of the income he earns from the business.

Give you shares? Lady, you have no idea what you are talking about.