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I have a verbal partnership, nothing in writing. Almost everything

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is in my name including...
I have a verbal partnership, nothing in writing. Almost everything is in my name including my FBN, bank account, sellers permit, business insurance, workers comp., and FEIN. The business license is in both our names and the lease of our store front is in my partners name only. Since we started the business 6 mo. ago I have invested nearly 60,000 constantly putting in more and more capital my partner has not ever even at the start of the business put in any capital. And to make matters worse I recently found that he has written checks from my business checking account for his personal rent and utilities totaling over $3000. This ofcourse was unauthorized by me so there will be a police report and fraud claim for embezzelment. Do I have rights over my business? How much weight does the business license carry in this case? Or is the fact that I am liable for all taxes due give me the full rights since there isn't any written agreement?
Submitted: 8 years ago.Category: Business Law
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Answered in 13 minutes by:
7/4/2009
Business Lawyer: lwpat, Attorney replied 8 years ago
lwpat
lwpat, Attorney
Category: Business Law
Satisfied Customers: 25,387
Experience: Attorney with over 35 years of business experience.
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You do not have full rights since this is a partnership. Supposedly there are equal rights and also equal duties. Here you have a typical situation with no written operating agreement. You need to decide whether you want to proceed with this person or you want him out. Since he has equal rights, there is no fraud or embezzlement. You do have rights but he has the same rights. Here your are not going to like my advice but the easiest and probably the cheapest way is to buy him out. He may not be aware the you cannot really charge him with fraud and you can use that as leverage to get him out at a reasonable price.
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Customer reply replied 8 years ago
there is a fraud case according to bank of america because i am the only one on the bank account and he wrote the checks without my permission signed with his name and were for personal benefit not business related. I do want out of the partnership but to buy him out? What do i buy him out from when I've paid for everything thus far. Whats to say I can't just pack up the entire store and leave?
Business Lawyer: lwpat, Attorney replied 8 years ago

Normally the bank would be responsible since he was not on the account but you are charged with securing the checks and since he is a partner they are not responsible. Here I still disagree that law enforcement will get involved. While you may have a civil case, I do not see them charging him with anything criminal although he may mot be aware and you never know when LE will get involved and when they will not since it is an individual decision.

 

Here I still say the best way out is to pay him something and be done with it. Here he amy sign just in return for forgiveness of what he has taken.

lwpat
lwpat, Attorney
Category: Business Law
Satisfied Customers: 25,387
Experience: Attorney with over 35 years of business experience.
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