How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Law Pro Your Own Question

Law Pro
Law Pro, Criminal Defense Lawyer
Category: Criminal Law
Satisfied Customers: 24043
Experience:  20 years trial experience in defense of criminal cases
11688690
Type Your Criminal Law Question Here...
Law Pro is online now
A new question is answered every 9 seconds

I have a question. I opened a new business as a sole proprietorship.

Customer Question

I have a question. I opened a new business as a sole proprietorship. Opened business bank accounts under a sole proprietorship tax ID. I took on a 50/50 partner a few months later and we signed a shareholders agreement for an S-Corporation. We signed the shareholders agreement but never actually filed for the corporation and I continued doing business thru the accounts as a sole proprietor. A few months later we split up as partners because he found out I was paying my personal expenses out of the account and I was taking more money than he was getting. We then parted ways and he incorporated the company himself with him as the 100% owner, opened all new bank accounts under a new tax ID and I left. He is now trying to come after me for embezzlement. Even though we signed a shareholders agreement, we never actually opened a corporation. The bank accounts I paid personal expenses from were still under a Sole Proprietorship with me as the primary. So my question is does he actually have a case for embezzlement?? Would a 50/50 shareholders agreement for a corporation that was never actually filed hold up? Or was I entitled to that money because it was still technically a sole proprietorship in my name? Is this something that can be brought against me criminally?
Submitted: 3 years ago.
Category: Criminal Law
Expert:  Law Pro replied 3 years ago.
If you didn't actually file for the corporation - then you would be considered to be a partnership.

Was your partnership agreement with him that you could pay certain personal expenses unrelated to the business?
Customer: replied 3 years ago.
Nothing was discussed in the partnership agreement related to personal expenses.
Expert:  Law Pro replied 3 years ago.
Sorry. But if you took business monies and paid personal expenses without the permission of the other partner - that's wrong. That is embezzlement.


Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted.

embezzlement is a statutory offense so the definition of the crime varies from statute to statute. Typical elements are (1) the fraudulent (2) conversion (3) of the property (4) of another (5) by a person who has lawful possession of the property.
  • Fraudulent: The requirement that the conversion be fraudulent means simply that the defendant wilfully and without claim of right or mistake converted the property to his or her own use.
  • Conversion: Embezzlement is a crime against ownership; that is, the owner's right to control the disposition and use of the property. The conversion element requires a substantial interference with the true owner's property rights (unlike larceny, where the slightest movement of the property when accompanied by the intent to deprive one of the possession of the property permanently is sufficient).
  • Property: Embezzlement statutes do not limit the scope of the crime to conversions of personal property. Statutes generally include conversion of tangible personal property, intangible personal property and choses in action. Real property is not typically included.
  • Of another: A person cannot embezzle his own property.
  • Lawful Possession: The critical element is that the defendant must have been in lawful possession of the property at the time of the fraudulent conversion and not have mere custody of the property. If the defendant had lawful possession the crime is embezzlement. If the defendant merely had custody, the crime is larceny. Determining whether a particular person had lawful possession or mere custody is sometimes extremely difficult.

Please ask for "Law Pro" if you have any further future questions!

Please click on the ACCEPT button for my answer so that I receive credit for assisting you (even if you placed a deposit or have a subscription program). You may continue to ask follow-up questions after accepting. If the information is helpful, I would very much appreciate positive feedback. Bonuses are also appreciated. If you do have a follow-up question, press REPLY, NOT relist, or else I won’t receive the question.
Law Pro, Criminal Defense Lawyer
Category: Criminal Law
Satisfied Customers: 24043
Experience: 20 years trial experience in defense of criminal cases
Law Pro and 7 other Criminal Law Specialists are ready to help you
Customer: replied 3 years ago.
It wasnt a partnership agreement, it was a shareholders agreement for a corporation that we never filed, so the bank accounts remained under a sole proprietorship with only my access to it. Not sure if that makes a difference....but the money that i paid my personal expenses with only came out of a sole proprietor account. Would this be considered a criminal or civil matter in your opinion??
Expert:  Law Pro replied 3 years ago.
Then it would be perceived as a partnership agreement. However, even if not, then you would still be subject to the state's partnership act statute if the agreement was silent on any issues.

It's how the monies went into that sole proprietor account - if they went into that account as your monies after the split - then you're fine. If not . . . .

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Your Expert advise has provided insight on a difficult situation. Thank you so much for the prompt response. I will definitely recommend your website to my friends. Norma Pensacola, FL
< Last | Next >
  • Your Expert advise has provided insight on a difficult situation. Thank you so much for the prompt response. I will definitely recommend your website to my friends. Norma Pensacola, FL
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
 
 
 

Meet The Experts:

 
 
 
  • Fran L.

    JustAnswer Criminal Law Mentor

    Satisfied Customers:

    8061
    18 yrs of NYC public defense. Extensive arraignment, hearing, trial experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/RE/retiredlawyer/2012-6-6_19326_franL.64x64.jpg Fran L.'s Avatar

    Fran L.

    JustAnswer Criminal Law Mentor

    Satisfied Customers:

    8061
    18 yrs of NYC public defense. Extensive arraignment, hearing, trial experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    2079
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/NA/nathanmoorelaw/2011-5-31_21375_headshotbig.64x64.jpg Nate's Avatar

    Nate

    Lawyer

    Satisfied Customers:

    1625
    Over 10 years of criminal defense practice.
  • http://ww2.justanswer.com/uploads/LA/LawTalk/2012-6-6_17379_LawTalk.64x64.JPG LawTalk's Avatar

    LawTalk

    Lawyer

    Satisfied Customers:

    1434
    30 years legal experience
  • http://ww2.justanswer.com/uploads/PH/philip.simmons/2012-6-7_161915_BIGPhilipSimmons.64x64.jpg P. Simmons's Avatar

    P. Simmons

    Lawyer

    Satisfied Customers:

    1418
    16 yrs. of experience including criminal law.
  • http://ww2.justanswer.com/uploads/marshadjd/2009-6-1_194320_marshajd.jpg Marsha411JD's Avatar

    Marsha411JD

    Lawyer

    Satisfied Customers:

    1380
    Licensed attorney with 27 yrs. exp. in criminal law
  • http://ww2.justanswer.com/uploads/RO/RobertJDFL/2012-6-6_175352_7538220120606.64x64.jpg RobertJDFL's Avatar

    RobertJDFL

    Lawyer

    Satisfied Customers:

    1300
    Experienced in multiple areas of the law.