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I made an offer attempting for repayment that I was completley willing to overlook any interest as long as I could get repayed on principle amount. The contract is very loose, it shows the amount loaned, the agreement to repay and the penty for nonpayment (which w as a clause he entered. I also offered to resell my equity back at same rate I paid, as my goal is to be out of buisness with this group. I also recieved 2 checks for 5k each as repayment that then bounced. I still have checks but if I deposit them all hell will break loose. I feel trapped into this company, as I have recieved nothing for my ownwership in over a year. One partner collects resisuals, other who keeps name off of everything (felony for bank fraud) gets a salary, I work as an employee and keep getting told company is still in red..I know we make moneu..we have 3 buisnesses going. I made a huge mistake getting into buosness with friend
Does an individual signing a corporation's check commit the individual to personal liability, should the check be returned NSF? Generally no.
Article 3 of the Uniform Commercial Code deals with checks. Revised Article 3 provides that a party with authority to sign a corporate check no longer has to indicate his or her representative capacity on the check.
Revised Article 3 recognizes that the party signing the check in a representative capacity, such as a controller for the company, is not personally liable for the NSF check.
However, you, the vendor, may have a separate claim for fraud against against the signer, depending on the jurisdiction. Under a fraud claim, the vendor must establish that the individual signed the corporate checks aware that they would not clear as there were insufficient funds on deposit in the corporate account to cover the checks.
So, I would contact the person back and inform them that you are going to sue the company for breach of contract and them personally for fraud.
A state court of appeals recently considered a vendor's fraud claim against a corporate bookkeeper for signing checks when there was insufficient funds. In that case, bookkeeper signed two checks for payment to a vendor that later bounced. The vendor sued the bookkeeper for fraud. The court recognized that corporate signers of checks who sign checks when they know the corporate accounts contain insufficient funds may be liable.
That would get them moving I would think - their potential personal liability for fraud.
Regardless, I would file suit against the corporation for breach of contract. That although you are an owner - you are also a creditor.
The result is - potentially you could own this company 100% even (if you would want it).
Not sure if it makes a difference, but as a small company, at the time all checks were written thru personal account of one of the 35% owners. I was given checks in order to show they were attempting to repay debt, but then requested next day I hold from depositing. Checks were written in may 2013..thanks for ur help...I think I have recieved enuff info ti get started. I should have found out more about partners before lending them money! I will give u great rating for ur time!
(1) A person commits the crime of negotiating a bad check if the person makes, draws or utters a check or similar sight order for the payment of money, knowing that it will not be honored by the drawee.
(2) For purposes of this section, unless the check or order is postdated, it is prima facie evidence of knowledge that the check or order would not be honored if:
(a) The drawer has no account with the drawee at the time the check or order is drawn or uttered; or
(b) Payment is refused by the drawee for lack of funds, upon presentation within 30 days after the date of utterance, and the drawer fails to make good within 10 days after receiving notice of refusal.
(3) Negotiating a bad check is:
(a) A Class A misdemeanor, except as provided in paragraph (b) of this subsection.
(b) Enhanced from a Class A misdemeanor to a Class C felony if at the time of sentencing it is established beyond a reasonable doubt that the person has been convicted in this state, within the preceding five years, of the crime of negotiating a bad check or of theft by deception by means of a bad check. [1971 c.743 §161; 1979 c.594 §1]
The court may place a civil penalty on bad check writers amounting anywhere from $100 to triple the amount of the check. The penalty, however, may not exceed the original amount by more than $500. Such penalties are made in addition to the original amount the check was written for.
The court also has the discretion to waive these penalties if the violation was a result of economic hardship. The check writer will then only be responsible for fees owed to the drawee, including attorney fees.
Oregon gives district attorneys the option of creating a bad check diversion program to teach bad check writers how to better manage their checking accounts. The program is offered as an opportunity to forgo trial, but full restitution must still be paid to the drawee. If accepted, the check writer will need to attend check writing classes for six months.
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