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STBX Continues to pull money out of the business account.

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  • STBX Continues to pull money out of the business account.

    STBX continue to pull out money of the business bank account. she is 40% ownwer. She does not tell me about it nor does she except phone calls. What should I do here? I dont want to get my self in bigger problem. High conflict.

  • #2
    Speak to the bank and see what can be done.

    Comment


    • #3
      If I remember you correctly, you are an IC? Are these funds her only source of income- were you income splitting before separation?
      Start a discussion, not a fire. Post with kindness.

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      • #4
        I was giving her 3000 a month. yes we were doing didvidends. but since seperation I was giving her that amount. Now she is just helping herself to the funds in the INC business account.

        Comment


        • #5
          You are the majority voting shareholder -- Resolution to change signing officers, remove her signature from the bank account. Send a certified copy to the bank. Continue to provide her the $3000/month pending final resolution.
          Start a discussion, not a fire. Post with kindness.

          Comment


          • #6
            Thanks. I was just wondering if I go to my coorporation lawyer and vote her out can or well I get in trouble with the divorce.

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            • #7
              Nope - she's entitled to 1/2 value at the separation value. Make sure you've got the month ends complete for separation month, and can provide those financials for valuation.

              Call your corporate lawyer, kick her off signing authority at the bank. That move will save you from having to incorporate another holdco. {cleaner, to incorporate another holdco, but what a waste of money on your end}

              You can't leave with her with no funds - the company should still continue to pay her salary/dividend cheques at the past levels, but even then we should think about decreasing those cheques gradually over a time period, if she can be self sufficient. I'm sorry, I don't recall her scenario, career history, # of kids, etc..
              Start a discussion, not a fire. Post with kindness.

              Comment


              • #8
                Thanks again. I get off in 5 days I well make an appointment with my corp lawyer.

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                • #9
                  Be sure to keep the records of all her withdrawals. You can get that money back in the equalization process.

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                  • #10
                    You can get things done yourself by going to your local Alberta registry and simply changing things there (will cost you 25 - 30.00). Then you take the stamped document & receipt to your bank. Done deal. Beware - banks don't like getting caught up in divorce. We had one bank abruptly give us 30 days notice they were closing one of our business accounts. When I asked for reason I was told they didn't want our business as they don't like to get involved in business/divorce. This was a major bank.

                    Comment


                    • #11
                      While you may want to sit back and hope things resolve you should be aware that your wife does have legal advice. At the time of my separation my lawyer advised me to "get your hands on as much cash as possible." I did not heed his advice as I was naive and thought that if I drained the company account we would be unable to pay bills. My ex did indeed help himself to the company account. He put everything in his family/g'f's accounts. I will never know if he contemplated simply filing a notice and taking my name off of the business (he was 51% owner and I was 49%). Income we had at the time was primarily a contract between our limited company and a very large Canadian transportation company. My ex went personally bankrupt and left me with the bills. He then went on to do the same work. I had a sheriff seize the remaining equipment in order to pay company bills. This didn't happen overnight. At that time I had a corporate lawyer, a divorce lawyer and a criminal lawyer (ex's g/f was trying to put a peace bond on me due to false accusations - she failed). I made a critical mistake by not suing the company which carried on business with my ex (breach of contract). I was busy trying to find and salvage company assets and I had no money. Despite the Interim Orders for my ex not to dispose of company assets he did so anyhow. When he went bankrupt I became the sole Director of the incorporated company by default. I was liable for all company debt due to Director's liability. It has taken 5 years to deal with everything and things are still not fully resolved.

                      Yes you might want to wait a while and hope things settle down but do not lose sight of the fact that your wife is currently receiving legal advice and she may not have the same loyalty to your company. She is quite aware that you can divert income away from her. Sure the court will direct you to pay support but everything takes time.
                      Last edited by arabian; 10-25-2014, 11:41 AM.

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                      • #12
                        I think if u just give her 3k a mknth not based on a court order it wont be tax deductible.

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                        • #13
                          Is she a director or officer of the corporation, or is she just a shareholder? If she is just a shareholder, go to your bank and prepare a new banking agreement/resolution removing her as a banking signatory.

                          If she is an officer and/or director? The director position is the only one would require involvement of the STBX. If she is a director, you will have to hold a meeting of the shareholders removing her as a director. You will have to give notice of the meeting and what it is about, as she is a shareholder. The amount of notice should be set out in your by-law, not more less than 10 days and not more than 50 days notice the standard amount, but double check your by-law to be sure. You then hold the meeting and remove her as a director. As the majority shareholder, you can out vote her. Then, as sole director you simply remove her as an officer of the corporation. You have your lawyer, or someone who is CORES certified, file the notice of change with the Alberta registry. You take a copy of the filing removing her as a director/officer to your bank and update their records.

                          That is what is required in Ontario. Alberta may be slightly different. Your corporate lawyer would know exactly what is required.

                          Comment


                          • #14
                            Next question.

                            When i started the company it was new no credit. So I used my personal credit to purchase the vechile. the company treats it as its own writes its off under company expenses and depreciation and the company bank account is making the payments out of the company account.

                            Now for diclousure purposes I should be using it as a business asset just like my accountant is doing through the business of should I use it as a personal asset.

                            Next question wife had signed off on the dower right to sell the house ( she is not on title ) can I lower the price without her consent since she had signed the dower?

                            Comment


                            • #15
                              IF your wife signed off dowager rights (with independent legal advice) then you are free to dispose of your home. When it comes time for equalization the loss or gain of this matrimonial asset will be calculated. If you realize a profit on the sale of the house, I believe your ex is entitled, by the matrimonial property act of Alberta, to a percentage of the increase in value of the home.

                              You can do things 1 or 2 ways and your accountant would be able to advise you as he would have known this when doing your taxes. You can lease the vehicle from yourself to the incorporated company. This is extra bookkeeping. The other way would have been for you to have sold the vehicle to the business. Keep in mind that when you go to dispose of assets owned by the business you have to fill out forms with CRA.

                              Often people operate a proprietorship alongside of an incorporated company. I believe my ex did that for quite a while. When we divorced he left me with all the corporate debt and merely started up his own proprietorship again. Seems to have worked for him just fine.

                              Comment

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