Flexplan - a company is taking over another, do I pay the balance?
This is only one of a series of questions your friend needs to understand. They will also need to know what happens to: vacation balances; the vacation earning schedule; retirement fund matching; the pension program; all the costs and rules regarding health, dental and vision;life insurance amounts. Some of these can be changed immediately. Some will not be changed this year because of IRS regulations. Everything can be changed by the next year. But there is no way to know if they will change a little a possible or as much a possible. It will depend on if they are buying the company, or if the company is going out of business and the new company is buying the remnants. They may also be essentially terminating the employees at the old place, and giving them the first opportunity for interviews. If they are essentially quitting they will not have to continue paying into the plan. The bad news is that their last day of work is also probably their last day to incur expenses that they can pay for with the flexible plan. If They are being purchased or absorbed the company will likely make no changes to the current plan, and fold them into the plan next year. I have been involved with company purchases and company splits, and this is how it was handled.
I have had this happen a couple of times because of splits or sales of portions of the company.  The general timeline was to announce how the split was to be handled; then the split; then a freeze in purchasing stock in the other company; then a freeze in sales; followed by a short blackout period; then the final transfers to funds/options/cash based on a mapping announced at the start of the process. You need to answer two questions: To determine if the final transactions will make the market move you have to understand how many shares are involved compared to the typical daily volume. There are two caveats: professional investors will be aware of the transaction date and can either ignore the employee transactions or try and take advantage of them; There may also be a mirroring set of transactions if the people left in the old company were awarded shares in your company as part of the sale. If you are happy with the default mapping then you can do nothing, and let the transaction happen based on the announced timeline. It is easy, and you don't have to worry about deadlines. If you don't like the default mapping then you need to know when the blackout period starts, so you don't end up not being able to perform the steps you want when you want.  Timing is up to you. If the market doesn't like the acquisition/split it make make sense to make the move now, or wait until the last possible day depending on which part they don't like. Only you can answer that question. This is dumb. The sub company will lose money but the parent company will pay taxes on the income they made off of expenses to the subcompany.  This doesn't systematically reduce their risk either. Banks will loan more money if the parent company is liable to pay the bills if the sub company can't. So yes, a bank may make a loan to the sub company without any liability on the parent company, but its going to be a very small loan compared to what they would've given the parent company. The company may not permit a transfer of these options. If they do permit it, you simply give him the money and he has them issue the options in your name.  As a non-public company, they may have a condition where an exiting employee has to buy the shares or let them expire.  If non-employees are allowed to own shares, you give him the money to exercise the options and he takes possession of the stock and transfers it to you.  Either way, it seems you really need a lawyer to handle this. Whenever this kind of money is in motion, get a lawyer.  By the way, the options are his. You mean he must purchase the shares, correct? Wait. You started a company and contracted it with the company you currently work for? I don’t know why but for some reason this sends up a legal red flag to me. I have no idea, but maybe double check that there isn’t any violations in this arrangement... or just never tell them. You were approved for the offer based on your current credit, just like any other offer of credit.  The offering bank knows you'll likely use their offer if you accept it.  If you accept the offer and load up the new card to the max with your (or your relative's) debt and your score will then change.  Depending on the other factors that impact your score this could carry some negative consequences related to your own ability to obtain debt.  Also, consequently, this will have a tremendously positive effect on your relative's ability to obtain debt. I understand that you trust this person enough to be asking this question.  No amount of trust protects from the unforeseen.  Ultimately while this debt resides in your name, in the eyes of the creditor it is yours.  While you could seek legal remedy from your relative if they don't or can't pay, you will be on the hook to the bank.  Again, there are unforeseen events, a car accident, a death, etc.  If this person passes, that's your debt. IF (and I can't emphasize the IF enough) I was ever in a position to be considering what you're considering I would do this: I mentioned in a comment under your question.  This feels like it would carry a tax consequence (or maybe benefit) to one or both of you.  I have no idea of the legalities, or whether or not any of this violates a cardmember agreement, but as other answers have pointed out, I doubt there is a balance transfer police. "It seems like this was a ""stock for stock"" transaction. That is, your company was acquired, not for cash, but for the stock of Company X in a deal that your company's board of directors ""signed off"" on.  Your company no longer exists, and that's why your stock was cancelled. The acquirer will be sending you an equivalent amount of stock in their Company, X. You don't need to worry about taxes, only accounting, because this is a ""non-cash"" transaction. What this means that your cost basis in the stock of Company X will be what you paid for the original company's stock (not its value on the day of the merger, which may be higher or lower than what you paid)." I am probably not the most qualified person, but I have taken some managerial finance courses.  If company B is still in tact, has its own documentation saying it's a company and all that, the only income company A would need to claim from B is that which B profited and the profits were given to A.  I see the above scenario similar to owning an asset, like a bond, which pays you interest.  If the companies are merged, most definitely but that probably wasn't your question. How is this not a breach of contract? Is it just because the corporate entity you're doing business with has gone out of business? Isn't the parent company still responsible?  It seems to me that if it's not, there are a lot of ways that an unethical person / company could game the system. You're can only get used (you are being used now,) if you let them.  Tell him that a 25% share is the minimum you'll take and that you'll hand him all the login information in the morning if he doesn't accept your terms. Don't bother explaining who did what, he surely knows. And if he doesn't, he surely won't have dome revelation by you telling him the work you did. Quit and learn your lesson and start a competition business exactly the same, and smoothly push your network to your own shop.   Your pal that took out the loan may be entitled to some more equity than you and the third guy, but $10k is really not much money in business. You guys should be making that in revenue in just a matter of weeks. Especially if you have to support three employees / shareholders.   Of course, we only know your side to this story. He may have spent a lot of time on licensing and using his personal network to accomplish certain things that you fail to mention here or are just unaware of. If I were you, I would go to the bank right now, pay the $100 and close the account.  I would stop the bleeding first then consider the fallout later.   Do you own the account jointly with your partner(s) as a partner or does the partnership (a separate formal entity) own the bank account with you a named representative?  Those are two very different situations. If you're a joint owner, you're liable for the fees; along with your other partners in accordance with your partnership agreement.  You never closed yourself off the account and that's your problem. If the dissolved partnership owns the account, you're not personally liable for the fees.  You were never a personal owner of the account, now that the account is negative you don't magically become personally liable. The differences here are very nuanced and the details matter.  If this were a large amount of money I'd suggest you go see a lawyer.  Since this is about $100 I'd just pay it, make sure the account is closed, and move on. What did you sign when the account was opened? What did you sign when you left the company, to transfer those responsibilities? Unless the bank has a record of someone else being responsible, they are correct in billing the one who signed their paperwork.  Of course this also probably means you still have access to the account, so your ex-partners should be Highly Motivated to help you fix this. If you want a legal opinion, try over in the Law area, or (better) ask a real lawyer in your jurisdiction. That's out of scope here. For one, the startup doesn't exist yet, so until March I will get nothing on hand, though I have enough reserves to bridge that time. I would not take this deal unless the start-up exists in some form.  If it's just not yet profitable, then there's a risk/reward to consider.  If it doesn't exist at all, then it cannot make a legal obligation to you and it's not worth taking the deal yet.  If everything else is an acceptable risk to you, then you should be asking the other party to create the company and formalize the agreement with you. As regards reserves, if you're really getting paid in shares instead of cash, then you may need them later.  Shares in a start-up likely are not easy to sell (if you're allowed to sell them at all), so it may be a while before a paycheck given what you've described. For a second, who pays the tax? This is my first non-university job so I don't exactly know, but usually the employer has to/does pay my taxes and some other stuff from my brutto-income (that's what I understood). If brutto=netto, where is the tax? This I cannot answer for Germany.  In the U.S. it would depend in part on how the company is organized.  It's likely that some or all of the tax will be deferred until you monetize your shares, but you should get some professional advice on that before you move forward.  As an example, it's likely that you'd get taxed (in part or in whole) on what we'd call capital gains (maybe Abgeltungsteuer in German?) that would only be assessed when you sell the shares. For third, shares are a risk. If I or any other in the startup screw really, my pay might be a lot less than expected. Of course, if it works out I'm rich(er). This is the inherent risk of a start-up, so there's no getting around the fact that there's a chance that the business may fail and your shares become worthless.  Up to you if you think the risk is acceptable.  Where you can mitigate risk is in ensuring that there's a well-written and enforceable set of documents that define what rights go with the shares, who controls the company, how profits will be distributed, etc.  Don't do this by spoken agreement only.  Get it all written down, and then get it checked by a lawyer representing your interests. You can either write it off or pursue it. If you write it off I wouldn't do business with the client again, until they bring their balance owed to you back to zero.  If you pursue it, try to reach out to the client and find out why they are not paying what they owe you and try to work out a deal with them if they seem negotiable. If they aren't negotiable then you could take the issue to court, but you'll only be proving a point by then. Because some overhead expenses will be shared (accounting, most salaries, sales etc.) it's far easier to give him an ownership stake in the company because you won't be able to calculate net profit for each component correctly. What I would say to him is, in exchange for $80K and the contract with his building company (make sure it is significant enough to be worth it$ you will give him 35% of the company.   How did you come up with he $1 million in net profit calculation? How much of that is reliant on his business? You should probably consult an attorney. However, if the owner was a corporation/LLC and it has been officially dissolved, you can provide an evidence of that from your State's department of State/Corporations to show that their request is unfeasible. If the owner was a sole-proprietor, then that may be harder as you'll need to track the person down and have him close the plan.