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Ely, Counselor at Law
Category: Legal
Satisfied Customers: 99428
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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Can a business partner legally transfer money from our

Customer Question

Can a business partner legally transfer money from our business account into his personal account and make cash deposits into his personal account without notification ?
Submitted: 4 months ago.
Category: Legal
Expert:  Ely replied 4 months ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

Please tell me:

1) Is the business incorporated?
2) Do you have a partnership agreement between the two of you in writing?

This is not an answer, but an information request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.

Customer: replied 4 months ago.
It is an LLCPartnership agreement only defines duties which are broken down into:! Adminstrotive duties2 Operations duties
Expert:  Ely replied 4 months ago.

Thank you.

1) If the operational duties allow him to do this, then he can. If they do not, then he cannot and doing so can give rise to a civil action for breach of fiduciary duty amongst partners (see HERE), negligence, and fraud.

2) If he is doing so specifically to steal money, he can be liable for state version of embezzlement - a criminal matter.

3) Finally, by playing around so freely and transferring money back and forth between the LLC and personal accounts without a formal system, he risks eroding the legal protection afforded by the LLC - see HERE.

I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how experts get credit for our time. Rating my answer the bottom two faces/stars (or failing to submit the rating) does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.