Somewhat related to this question.

A few months ago, a family member (it's not me, really) got a job at a small office with under 10 employees. The salary is low but not indignantly so, and she even got a small raise shortly after joining the company. However, the business owner is a wreck managing the company's finances. He leads an extravagant lifestyle, mixes his personal money with office money, and more than once the employees have been left wondering whether they would get paid on time that week. The latest incident was giving employees two days "off" because there was no money to pay them. The company has been in business for several years, so I don't know if these paycheck shenanigans are a recent thing or not.

I have repeatedly advised my family member to look for another job, but she insists on staying for a year or two because she is gaining experience in a new field and she feels some sense of loyalty due to an upcoming crunch time (and a lot of overtime pay). It took her some time to find this job so I can understand her reluctance to leave, but I can also see that this is not a healthy business. How can I articulate to her that she really should be looking for a different job? Barring that, what should she do in order to ensure an uninterrupted income while she stays at this company?

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    More bluntly, my point is I don't see how you go from "have been left wondering whether they would get paid on time that week" to "I completely believe I will be paid all the hours of OT I log."
    – user42272
    Jan 20, 2016 at 0:32
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    @Pedro Depending on how the company was organized (LLC, partnership, sole proprietorship, Etc) using company funds would be within the 'right' of the sole owner. As he or she would be withdrawing equity from the company AFAIK. Financially speaking, yeah I agree. Owner is reckless and your family member should look for new employment.
    – Bluebird
    Jan 20, 2016 at 0:33
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    You have given her your advice, she has taken it on board and made a decision to carry on where she is. I think it's time to respsect her decision and let it drop. Jan 20, 2016 at 1:09
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    if the company doesn't pay on time, then the amount of loyalty your family member should have towards them is exactly zero.
    – gnasher729
    Jan 20, 2016 at 9:08
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    @BobtheBuilder: In the UK, you most definitely do not have the right to withdraw money from the company, except as a salary (income tax paid), or as a loan (repayable, including repayable to creditors in case of bankruptcy), or dividend payment (tax paid, plus it is illegal if your company doesn't have the money).
    – gnasher729
    Jan 20, 2016 at 9:10

3 Answers 3


Number one: You CANNOT ensure uninterrupted income. Understand that, and take appropriate precautions.

Your relative should bank 6 months' "subsistence level" expenses as soon as possible. There will come a day when she finds herself 4 weeks (or more) without being paid, and decides she's had enough.

Number two: This WILL happen. It's not if, it's when.

I worked for a company several years ago owned by a couple doing EXACTLY what you describe. I escaped about 10 months before it all imploded. Those that were still there did not fare well.


A poorly managed company will also have limited growth. This also translates into further problems down the line - layoffs, lack of promotion, lack of raises.

There's no way to ensure uninterrupted income. Going bankrupt isn't exactly a crime, even if the boss is mismanaging. You can probably do something if they're forcing staff to work but not paying.

Surprisingly situations where a company hits near bankruptcy and then bounces to become a hundred-million dollar company are common. Even with owners who are not very bright. So your family member might actually be doing the right thing.

  • I question "common" - can you define "common", and do you have any references to back that up? Nov 21, 2018 at 11:36
  • @Mawg Nearly running out of money is an expected part of the process to building startups. "If you can just avoid dying, you get rich." paulgraham.com/die.html
    – Muz
    Nov 23, 2018 at 7:58
  • Sorry, it was the bounce-back to a hundred-million dollar company which I don't think is so common. Maybe among those who make to to become a hundred-million dollar company - I can see how they might have overcome teething troubles - but I doubt hat such a bounce back is common among all start-ups. It's just a question of what's the sample here - all startups or all that make it. Sorry if it sounds like nit-picking :-) but statistically, I would say that his current company is on its way down the tubes. Nov 23, 2018 at 8:02
  • Oh, statistically, it is very likely that the company is doomed, yeah. But my point was that a lot of people who work in startups with poor salaries anticipate the risk and gamble on the company some day hitting it big, and they're willing to ride a company to the bottom. I don't think it's fair to judge or try to change a relative's mind about it. The odds are at least good enough that early stage investors make it into some kind of SOP, or at least write essays encouraging people not to give up on them.
    – Muz
    Nov 23, 2018 at 8:25

Juggling money is nothing new in small companies especially sole ownership ones, I do it myself, but I can always cover it from my other businesses if I have to, so no one has ever gone unpaid. It really comes down to who is juggling the money. Do they have other resources if things go South or are they living day to day. If your relative decides it's the latter then they need to start looking for another job.

The worst thing in your question is a couple of days off to avoid paying staff. That is a terrible sign that the boss is out of control even if he/she had a legitimate reason for being broke. It's also a sign of an unhealthy business that staff can take a couple of days off without business repercussions.

So in summary, unless the boss is wealthy in his own right or has other resources, this looks very bad for your relative and will probably all fall to bits one day. Best if your relative starts looking for another job now.

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    Actually, in the UK you are only allowed to touch your own company's money either if the company gives you a loan (which is then an asset to the company, available to creditors in the case of bankruptcy) or as a dividend payment, and paying an amount of dividends that leave the company unable to pay its bills is illegal and can be criminal.
    – gnasher729
    Jan 20, 2016 at 9:07
  • @gnasher729 Are you saying it doesn't happen in the UK? Sole owners never put their hand in the till without documenting it and entering it into their accounting package?
    – Kilisi
    Jan 20, 2016 at 9:50
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    @gnasher Does this apply to every company form you can have in the UK? In most countries I am familiar with this applies to various forms of limited-liability companies, but usually not to sole proprietorships where the companies money is the owners money and they can do with it however they please.
    – Philipp
    Jan 20, 2016 at 9:53
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    @gnasher not necessarily. I will provide you example. Boss buys car company but uses it for personal vacation, speeding. Police notifies the car owner (company) and demands fine. Boss authorizes payment with company money as the driver identity was unknown. Perfectly legal in my country, so next time you see a luxury car driving far overspeed on your left think about me :) May 31, 2017 at 17:51
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    Another example of using company money for personal use is to pay invoices for "business dinners" and "business travels/vacations" where attendants are boss and his family. Useful to escape taxes, perfectly illegal May 31, 2017 at 17:53

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