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Old 11.07.2021, 07:05
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Sale Proceeds of Sale of a Building drawn out of company

This is a crazy bad situation I find myself in.
You might like to read this first for an idea of the situation.

https://www.englishforum.ch/finance-...s-company.html

After my mother sold the building that belonged to the Swiss company.
She transfered the sale proceeds from the company to the three shareholders including me.
I had told her NOT to do this as:
1) The sale proceeds of the sale belong to the Swiss company?
2) If you pay the monies out to the shareholders that would be considered a dividend payment and would be subject to tax.
3) That the company should be put into voluntary liquidation and then the payments would be return of share capital and increase in the capital and not subject to tax.

She said that she would do as she pleased and paid out the net sale proceeds of the building to my personal bank account chf 580,000 (50%) her bank account (25%) and her husband's bank account (25%).

I realised the consequences but thought maybe the company liable or she is liable for doing these transactions without permission of the board of directors (me ) and the shareholders ( me).
I actually even posted a letter (recorded delivery from the UK) to her before she made the transfer telling her with other things not to make the transfers and that the company needs to go through voluntary liquidation.

I resigned as director and told her that I could not be involved with the preparation of the accounts.
I also then became non resident of Switzerland as had no need to be a resident of Switzerland.

After the bank realised I was non resident, they demanded that I shut my bank account and closed the safe deposit box.

As I was going to be living in Thailand asked my Thai secretary to open a Swiss Franc account in Thailand and transfered the balance to her Swiss Franc Account.

An accountant took over the company accounts and then I got a demand to pay the company about chf 312,000 based on 580,000 x 35/65.
I did not pay this back and I suppose wrongly ignored this demand.
I then received court demand for these monies.

I tried to defend the claim on the grounds that I was not a shareholder (see previous link at the time of the sale of the shares) again probably wrong.

I am now being pursued by the accountancy firm and court for these monies with court costs and legal costs and interest at 5% per annum.

Where do I stand?
What happens if I do not pay these monies back to the company? Is it a criminal offence or civil offence?
Is it possible to negotiate/plead with the tax authorities and say that if she had not done this, the company could have gone through voluntary liquidation?

Unfortunately my mother, despite the cause of the situation has alzeimers and is like a vegetable with 24/7 care living with her.

If I pay these monies with interest and court and legal fees I have lost all the 360,000 chf I put into the company with regard to the purchase of the shares of the building.
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Last edited by Cashboy; 11.07.2021 at 08:54.
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Old 11.07.2021, 07:55
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Re: Sale Proceeds of Sale of a Building drawn out of company

I feel this is in appropriate place for this.

Jesus!
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Old 11.07.2021, 08:01
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Re: Sale Proceeds of Sale of a Building drawn out of company

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Where do I stand?
What happens if I do not pay these monies back to the company?
Is it possible to negotiate/plead with the tax authorities and say that if she had not done this, the company could have gone through voluntary liquidation?.
Umm, hire a lawyer an get proper epxert legal advice tailored to your situation? Or are you really going to rely on EF armchair legal advice to get you through a problem of this magnitude where hundreds of thousands of francs are involved?

The mind boggles.
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Old 11.07.2021, 08:09
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Re: Sale Proceeds of Sale of a Building drawn out of company

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Umm, hire a lawyer an get proper epxert legal advice tailored to your situation? Or are you really going to rely on EF armchair legal advice to get you through a problem of this magnitude where hundreds of thousands of francs are involved?

The mind boggles.
I agree but also have had some very good advise on the EF forum.
I also had a Swiss lawyer that was supposed to be good but failed badly regarding another matter.
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Old 11.07.2021, 09:26
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Re: Sale Proceeds of Sale of a Building drawn out of company

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I also had a Swiss lawyer that was supposed to be good but failed badly regarding another matter.
Then I would get another lawyer, Switzerland is full of them and you are not tied into one option. EF is good for casual advice, but when push comes to shove your questions and circumstances are not casual and you need definitive and concrete answers.
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Old 11.07.2021, 09:39
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Re: Sale Proceeds of Sale of a Building drawn out of company

As Chuff said, hire a lawyer as you were a director at the time the funds were paid
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Old 11.07.2021, 10:39
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Re: Sale Proceeds of Sale of a Building drawn out of company

Monies were transferred from the company into my Swiss Bank account by my mother.
I was not even a signatory on the company bank account so clearly not me that made the transfer.
I did not touch the funds in my account until the bank told me I had to close the bank account because I had made myself non-resident.
I transferred those funds to a chf account in Thailand.

Probably thinking back, maybe I should have transferred those funds back to the company.
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Old 11.07.2021, 12:47
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Re: Sale Proceeds of Sale of a Building drawn out of company

I would suggest calling the accountant administering the company as he / she is obliged to act on behalf the shareholders which I assume you are.

My interpretation is that you have received funds that were withdrawn from the company by a person with access to the company bank account. That withdrawal was not authorised by the board as either a dividend nor a liquidation of equity and was therefore not legal, you are in receipt of illicit funds and you need to pay them back to the company.

To the get your money out of the company you need to get the board to dissolve the company like you outlined using the correct steps as per the articles of the company.
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Old 11.07.2021, 16:10
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Re: Sale Proceeds of Sale of a Building drawn out of company

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I tried to defend the claim on the grounds that I was not a shareholder (see previous link at the time of the sale of the shares) again probably wrong.
So what needs to happen before you accept that you are way out of your depth? This is the second thread you’ve opened up on the topic and it is clear that what you thought/think has no basis in law.

Even that not so bright lawyers are good at conveyance, they have been doing it over and over since they started out. And as your questioning of the lawyer showed he had done his homework.

Shareholders have no say in the running of the company’s daily affairs, this was a property company and managing the property was well within the competence of the directors. Again based on your questions to the lawyer at the time it’s clear your directorship was as a figurehead and your mother had all the power she needed to act and she did. Her current state of mind is not relevant.

The tax authorities deal in facts not fiction. It does not matter what kind of a theoretical alternative you come up with, it did not happen and it’s not going to be entertaining.

Lawyers act as agents not principals, so I’m sure for the right fee you’ll find one willing to present your alternative views to the world, but it is only putting off the inevitable, eventually you will pay. The figures are too big to be ignored by the authorities and the debt collectors.

Hire a good lawyer and instruct them to seek a settlement on the best term possible in the circumstances, settle and move on.
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Old 11.07.2021, 17:16
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Re: Sale Proceeds of Sale of a Building drawn out of company

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.

Hire a good lawyer and instruct them to seek a settlement on the best term possible in the circumstances, settle and move on.
Is it possible to make a settlement?
The problem is that my mother (1st Director) transferred the monies to our personal accounts from the company despite me telling her not to as we needed to do a voluntary liquidation.
The consequence was that the money paid should have been subject to 35% witholding tax I believe.
As a result I have been demanded to pay back $312,000.
I actually don't have those mnies left to pay back.

Is is possible to say that if there was a voluntary insolvency that there would not have been any tax to pay and can we do a deal of paying only 50% of the tax etc?
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Old 11.07.2021, 17:26
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Re: Sale Proceeds of Sale of a Building drawn out of company

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Is it possible to make a settlement?
The problem is that my mother (1st Director) transferred the monies to our personal accounts from the company despite me telling her not to as we needed to do a voluntary liquidation.
The consequence was that the money paid should have been subject to 35% witholding tax I believe.
As a result I have been demanded to pay back $312,000.
I actually don't have those mnies left to pay back.

Is is possible to say that if there was a voluntary insolvency that there would not have been any tax to pay and can we do a deal of paying only 50% of the tax etc?
The settlement will be the tax in full & reduced interest payable, many people go bankrupt due to tax debts, you need to find the money if you possibly can & settle this ASAP
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Old 11.07.2021, 17:27
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Re: Sale Proceeds of Sale of a Building drawn out of company

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So what needs to happen before you accept that you are way out of your depth? This is the second thread youíve opened up on the topic and it is clear that what you thought/think has no basis in law.

Even that not so bright lawyers are good at conveyance, they have been doing it over and over since they started out. And as your questioning of the lawyer showed he had done his homework.

Shareholders have no say in the running of the companyís daily affairs, this was a property company and managing the property was well within the competence of the directors. Again based on your questions to the lawyer at the time itís clear your directorship was as a figurehead and your mother had all the power she needed to act and she did. Her current state of mind is not relevant.

The tax authorities deal in facts not fiction. It does not matter what kind of a theoretical alternative you come up with, it did not happen and itís not going to be entertaining.

Lawyers act as agents not principals, so Iím sure for the right fee youíll find one willing to present your alternative views to the world, but it is only putting off the inevitable, eventually you will pay. The figures are too big to be ignored by the authorities and the debt collectors.

Hire a good lawyer and instruct them to seek a settlement on the best term possible in the circumstances, settle and move on.
I think looking back that you are spot on.
I have screwed up.
I have the courts with an application for the monies plus 5% per annum plus I suppose legal fees and court costs serving papers in the UK and then Thailand.

Is it the company negotiating against the tax or me that has to pay back the tax that is negotiating for reduced tax and say interest?
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Old 11.07.2021, 18:56
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Re: Sale Proceeds of Sale of a Building drawn out of company

I am not clear from your posts who is asking you to pay money. Is the company asking for its money back (in which case they are presumably asking the other shareholders for the same)? Or the Ticino tax authorities? Or both?
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Old 11.07.2021, 18:56
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Re: Sale Proceeds of Sale of a Building drawn out of company

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I have Swiss Nationality
I now live in SE Asia
I own a condo in Zermatt.
Guess you will be selling the condo. That might help get you out of your predicament.
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Old 11.07.2021, 23:11
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Re: Sale Proceeds of Sale of a Building drawn out of company

Maybe you should change your username, perhaps Cashlessboy is more appropriate now
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Old 11.07.2021, 23:40
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Re: Sale Proceeds of Sale of a Building drawn out of company

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Is it the company negotiating against the tax or me that has to pay back the tax that is negotiating for reduced tax and say interest?
There is no point guessing what is going on between the parties, get a lawyer and instruct him to come to some kind of agreement.
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Old 11.07.2021, 23:59
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Re: Sale Proceeds of Sale of a Building drawn out of company

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...my mother (1st Director) transferred the monies to our personal accounts from the company despite me telling her not to...
I actually don't have those mnies left to pay back.
Wait, what? You knew the money was transferred improperly, but instead of letting it sit there or transferring back you have already spent it?? I guess Mrs Doolittle is right, time to sell the condo. That should at least pay for the lawyer(s).
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Old 12.07.2021, 08:12
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Re: Sale Proceeds of Sale of a Building drawn out of company

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Wait, what? You knew the money was transferred improperly, but instead of letting it sit there or transferring back you have already spent it?
Yeah, this story sounds like someone who had serious debt or money troubles and got greedy/desperate.
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Old 12.07.2021, 08:26
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Re: Sale Proceeds of Sale of a Building drawn out of company

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Yeah, this story sounds like someone who had serious debt or money troubles and got greedy/desperate.
A huge buyer of gold, at about the previous peek in gold IIRC, no doubt been selling at a lower price to fund living expenses.
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Old 12.07.2021, 08:48
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Re: Sale Proceeds of Sale of a Building drawn out of company

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I am not clear from your posts who is asking you to pay money. Is the company asking for its money back (in which case they are presumably asking the other shareholders for the same)? Or the Ticino tax authorities? Or both?
I was 50% shareholder
mum 25% shareholder
her husband 25% shareholder

It appears to be the administrator of the company.

After 4 years would it be possible to pay the money back and then put the company into voluntary liquidation with no tax implications?
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