ROSELAND, N.J./September 29, 2008 -- Kenneth F. Kunzman, a partner with Connell Foley LLP of Roseland, New Jersey, was featured in the September 22, 2008 edition of NJBIZ in an article on tax delinquent businesses in New Jersey. In “Businesses Owe New Jersey About $170M,” reporter Martin C. Daks explores the phenomenon of companies that owe the state from $15,000 to over $5 million each in back taxes and what the state is doing and not doing to collect these funds.
Mr. Kunzman provided some insights into what could happen if one of these delinquent businesses was sold, indicating that buyers must beware not to get caught up in the seller’s tax or other liabilities. “If the stock of a business with trust-fund liability is sold to another firm, the buyer may be responsible for the liability,” Kunzman said, explaining that the state may be able to go after the new owner for those monies owed.
“But if the buyer purchases the assets of the old company, instead of its stock, the buyer may not have to assume the liability,” Kunzman added. When unincorporated businesses get sold, however, the waters get a bit murky. “If the buyer carries on the same kind of business, he or she may become responsible for the liabilities,” said Kunzman.
Mr. Kunzman explained that successors benefit from the assets and reputation of the former entity, so the successor should shoulder some of the liabilities. “If the state or other party has a lien on the assets, they may be subject to seizure from the new owner,” Kunzman concluded.
Mr. Kunzman is a member of the firm’s Taxation and Estate Planning, Corporate and Business Law, and Commercial Litigation practice groups. For more information, contact Mr. Kunzman at 973-535-0500 or kkunzman@connellfoley.com.