Shareowner in a C Corp owning a restaurant same as owning the restaurant?

[dleung65]

What is the name of your state? New York

I own shares in a C-Corp that owns a restaurant. Does that mean I am the owner of a business? Or just that I own shares in a corporation? As if I own shares in Microsoft, but obviously I don't own the business of Microsoft and not a "business owner".
Does it matter what percentage of shares I own?
I have been asked this on financial documents and I've always thought that I only owned shares of a corporation, not that I owned part of the restaurant. Basically the question might be like "Do you own a business?" I've often thought I owned a business if I was the sole owner or in a partnership, but not a corporation.

Thanks!

 

[quincy]

What is the name of your state? New York

I own shares in a C-Corp that owns a restaurant. Does that mean I am the owner of a business? Or just that I own shares in a corporation? As if I own shares in Microsoft, but obviously I don't own the business of Microsoft and not a "business owner".
Does it matter what percentage of shares I own?
I have been asked this on financial documents and I've always thought that I only owned shares of a corporation, not that I owned part of the restaurant. Basically the question might be like "Do you own a business?" I've often thought I owned a business if I was the sole owner or in a partnership, but not a corporation.

Thanks!

When you own shares in a business, you own shares only and not the business.

 

[Taxing Matters]

I have been asked this on financial documents and I've always thought that I only owned shares of a corporation, not that I owned part of the restaurant. Basically the question might be like "Do you own a business?" I've often thought I owned a business if I was the sole owner or in a partnership, but not a corporation.

You own the shares of a corporation. But if you own all the voting shares, or are even the majority/controlling shareholder, you may well be considered to own a business since your ownership of the shares allows you to control the corporation and thus run the business. So it would very much matter what the person asking the question is looking for.

 

[LdiJ]

What is the name of your state? New York

I own shares in a C-Corp that owns a restaurant. Does that mean I am the owner of a business? Or just that I own shares in a corporation? As if I own shares in Microsoft, but obviously I don't own the business of Microsoft and not a "business owner".
Does it matter what percentage of shares I own?
I have been asked this on financial documents and I've always thought that I only owned shares of a corporation, not that I owned part of the restaurant. Basically the question might be like "Do you own a business?" I've often thought I owned a business if I was the sole owner or in a partnership, but not a corporation.

Thanks!

As TaxingMatters said, if you are the sole owner or own enough shares to be a controlling owner then that makes a huge difference if you are applying for credit or anything else related to financial matters. A sole shareholder or majority shareholder basically owns the business even though they are a shareholder of a corporation.

 

[quincy]

Why exactly are you filling out financial documents?

Are the questions on the financial documents looking for yes or no answers? Is there a place on the financial documents for you to disclose the number of shares you hold in a company?

I personally think it highly unlikely that you would be totally unaware that you owned a business or a controlling interest in a business.

 

[Redemptionman1]

IIRC the Corporation C status rating flies as its own entity and the individual owners can not be held liable for the business entities taxes, profits, lawsuits etc. as they stand alone in the regards. Like has been said it depends on how many shares you own and as a percent of the overall owners equity that you weld is dependent upon those shares.

I wish I could recall if you if are shielded from liability if the business liquidates personally? I believe that you are since it stands alone.

 

[LdiJ]

IIRC the Corporation C status rating flies as its own entity and the individual owners can not be held liable for the business entities taxes, profits, lawsuits etc. as they stand alone in the regards. Like has been said it depends on how many shares you own and as a percent of the overall owners equity that you weld is dependent upon those shares.

I wish I could recall if you if are shielded from liability if the business liquidates personally? I believe that you are since it stands alone.

You are unless you have signed personal guarantees. Generally, with a small business that is closely held, creditors do require personal guarantees.

 

[Redemptionman1]

You are unless you have signed personal guarantees. Generally, with a small business that is closely held, creditors do require personal guarantees.

Right, or they have to establish enough business credit for the firm to stand on its own. If not then they have to guarantee that through personal assets.

 

[Taxing Matters]

I wish I could recall if you if are shielded from liability if the business liquidates personally? I believe that you are since it stands alone.

It depends on the details of the liquidation and the applicable federal and state law. If a corporation liquidates and distributes assets to shareholders while debts of the corporation remain unpaid then the shareholders receiving those assets may indeed be liable for the debts of the corporation up to the value of the corporate assets they received.

 

[zddoodah]

I own shares in a C-Corp that owns a restaurant. Does that mean I am the owner of a business?

"Owner of a business" is not a term that has a precise legal meaning, so whether owning shares in a corporation is the same thing as "own[ing] . . . a business" is subject to any given person's subjective perception.

I have been asked this on financial documents

What "financial documents"? Asked by whom?

 

[dleung65]

I think the the form for filling out for unemployment asked the question of "are you the business owner" or something along those lines. Of course, there was no context for that question, so as Taxing Matters said, it depends on what the form is looking for, but it wasn't explained. But it seems from the replies that there is no one definitive answer. I'm sure there have been other forms that asked that question. I've asked my financial advisor and also an estates lawyer who I was working with and neither would commit to a definite answer.

Perhaps a college financial aid form?

 

[dleung65]

Why exactly are you filling out financial documents?

Are the questions on the financial documents looking for yes or no answers? Is there a place on the financial documents for you to disclose the number of shares you hold in a company?

I personally think it highly unlikely that you would be totally unaware that you owned a business or a controlling interest in a business.

Usually they are looking for yes or no answers, which is why I am not sure what they are looking for, since usually there is no explanation as to how to answer. No follow-up questions either, such as percentage of interest. I do have controlling interest, so obviously I know that I "basically" can decide what to do. The reason I'm hazy on this issue is that I inherited this interest in the corporation, thus I wasn't involved in the formation at all and my father never explained it to me. But I wanted to know technically what is the right answer, if there is one.

 

[quincy]

Usually they are looking for yes or no answers, which is why I am not sure what they are looking for, since usually there is no explanation as to how to answer. No follow-up questions either, such as percentage of interest. I do have controlling interest, so obviously I know that I "basically" can decide what to do. The reason I'm hazy on this issue is that I inherited this interest in the corporation, thus I wasn't involved in the formation at all and my father never explained it to me. But I wanted to know technically what is the right answer, if there is one.

So, yes or no check boxes only?

Usually there will be a place on financial forms for additional information. If the answer to the question might be a determinative factor in whether financial aid, or a loan, is approved, I personally would add an asterisk and add a brief explanation.

 

[LdiJ]

Usually they are looking for yes or no answers, which is why I am not sure what they are looking for, since usually there is no explanation as to how to answer. No follow-up questions either, such as percentage of interest. I do have controlling interest, so obviously I know that I "basically" can decide what to do. The reason I'm hazy on this issue is that I inherited this interest in the corporation, thus I wasn't involved in the formation at all and my father never explained it to me. But I wanted to know technically what is the right answer, if there is one.

If you are talking about applying for loans of some sort, then yes, most creditors want to know if you are the owner of the business that you work for. The reason for that is that they may want to examine the books of the business before deciding to give you the loan in question, to make sure that the business is healthy and that you will continue to receive an income stream from the business.
If you have a controlling interest they can do that. If you only have a minor interest the odds of getting the people with controlling interest to agree to that is slim to none.