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I own an LLC (limited liability company) in Arizona, United States. More accurately, I am the sole member. I have no creditors, no investors, no board, no on else to worry about. This is federally taxed as a disregarded entity, and is not a non-profit.

Is it legal to spend company money, and use items spent with it it for personal use? For example, if I purchase a printer with company money (i.e. company bank/card), and intend to use it for company purpose(s), and I print something for my personal college, or something of that nature, is that legal? Or, buying 1,000ft of CAT6 (network cable), and cutting myself a cable for personal use? What about if I purchase an item with a company purpose, but later find it doesn't fulfill the purpose and use it for personal use, or transfer the property to myself or to a friend? Can I purchase an item, and the business excuse is "making an employee/person happy"? Am I "piercing the corporate veil"? Are there any tax considerations I have to consider?

It seems awkward, as there is a conflict-of-interest between myself and my company, as I both make decisions for it, and there is no check-and-balance.

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You and the company are separate entities. Let’s say your company has a printer. If that printer as a used printer is worth $500 then the company can’t give it to you for free or sell it for less than the value, or it will be tax evasion. The company’s profits are lower than they should be, and your wallet contains more money than it should.

The only legal ways are the company paying you a salary, or the company paying you dividends, with all tax implications.

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Given that the company is entirely your property, you can do what you like with it and it's assets. However there are likely to be tax implications; the IRS takes a dim view of people claiming that something is wholly a business asset when in reality it is used for private purposes as well. You will probably have to apportion use between private and company purposes and pay tax pro-rata.

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  • There's a lot of room to wiggle, depending on what you do and where you do it. I would say that if you're going to do a lot of work from a home office, that bit of CAT cable is probably okay since it will be used for businesses at home (along with general internet funs, though if it was bought for the office, best to buy your own for your own private funds) and while the office printer is generally for work purposes, an occasional print of non-business things won't be out of line (IRS agents do that too)+ – hszmv Mar 4 '20 at 18:11
  • +There's a joke among people who are familiar with tax issues that so long as you check the box and declare and pay taxes on money through illicitly gained money, you can declare the ski-mask, gun, and getaway car as business expenses (don't actually try this... it's probably only gonna make the judge laugh and compliment you on your boldness at your trial for bank robbery, but if I ever went into that line of work, I'd say worth it.). – hszmv Mar 4 '20 at 18:15
  • @hszmv In Germany, you would have to declare the income or be guilty of tax evasion. However, you are not obliged to say where the income comes from. And of course in the USA they got Al Capone over tax evasion. – gnasher729 Mar 4 '20 at 18:19
  • @gnasher729: U.S. does the same thing (you have declare the dollar value of the illegal gain, but you don't have to declare what it is or how you came to acquire it). And yes, Al Capone was famously found guilty of tax evasion, but because he living above the means of his declared income quite openly and wasn't declaring anything illegally gained at all (which would easily make up the gap... this was also pre-RICO so Capone's "murders" were basically equivalent to the King yelling "won't someone rid me of this meddlesome priest" and then finding the priest dead the next day. – hszmv Mar 4 '20 at 18:25
  • @gnasher729 Tax evasion was way more provable in evidence than "Capone ordered the hit but didin't personally kill the guy." – hszmv Mar 4 '20 at 18:26

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