What type of consequences does a s-corp. face when it fails? More so what do the owners face in this situation

I entered a partnership about 8 months ago. My partner reassured me that the company was solid. It didnt take me long to realize that that certainly wasn't the case. Eight months later we are in what seems to be a very bad situation. The money that we make is only enough to pay our employees and very little bills. Furthermore, my partner regularly takes money from the company for his personal needs. Granted, we have not been able to draw a paycheck for about a month. I have dumped in about 40 thousand dollars of my own money and have put my credit on the line and to help this company survive. Now, I am at a point that I have to start looking at options that will get me out of this situation. I have worked with the Small Business Development Center to try and push this forward with their help, but I am out of time. I would appreciate any help on this.

Are you a partnership or a s-corp? There is a big difference in the procedures between these two entities. If it is s-corp-are you a registered owner-is your name in the incorporation papers? Technically a s-copr can be dissolved in two ways: voluntarily and involuntarily. Voluntarily is when ALL of the owners agree do dissolve the entity. All assets get cashed in and all the outstanding bills of the cops have to be paid. Then, if anything is left, gets split between the owners in proportion of their ownership percentage, which is in the incorporation papers. If your name is not included there- then there is nothing you can do about it at all, without the permission of the other shareholder. My advice-consult an attorney.

Miss Nice is correct. I am a business consultant, and from the information you provided, whether your name is in the incorporation papers or not, you need to consult an attorney.
I hate to say this, and it is not legal advice, but based on the information you have provided, I am afraid you are going to take quite a loss regardless of what avenue you chose to pursue at this point.

Hello Tony G. if I may call you by that name ? I am sorry to hear about your situation and it is really very sad to see that your cannot trust anyone these days. I too am a business owner and as such it is a sad thing to have to tell you that your best bet is to let that one go and try selling your share to keep you from a total lost. In doing so a least you will have some money to invest in another successful business and be able to benefit and maybe have your own business again one day. Contact me at this number 1 (215 )-739-6287 at any time during the day and let's see what we can work out together OK ? Ask for Roy.