Red Red Wine is a wine bar that has been incorporated by Amie. It operates as...

60.1K

Verified Solution

Question

Accounting

Red Red Wine is a wine bar that has been incorporated by Amie.It operates as a closelyheld corporation. The other shareholdersare Amie’s brother and sister-in-law. Amie runs the day-to-daymanagement of the wine bar, including managing the books andrecords. Amie’s brother and sister-in-law handle distribution,sales and marketing. After a few years, Amie starts to feel likeshe is doing the majority of the work and becomes bitter about thebusiness relationship. She feels like she should be earning moremoney for the amount of work she does for the bar. Withoutdiscussing it with her brother and sister-in-law, Amie startstaking an additional draw from the wine bar every month in theamount of $1,000. She deposits the money into a business accountfor an LLC she created. On the books and records of the wine bar,Amie records this amount to the LLC as a “consultation fee.” CanAmie be held personally liable in this situation? If so, why?

Answer & Explanation Solved by verified expert

3.9 Ratings (396 Votes)

The wine bar has been incorporated by Amie and is operated as a closely held corporation whose other shareholders are Amies brother and sister in law She starts taking extra amount from the wine See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member