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J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2242
Experience:  Experience in general business transaction and formation matters.
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Is it illegal to borrow money from an llp business account,

Customer Question

Is it illegal to borrow money from an llp business account, if the amount is under the $ amount in the llp agreement that needs all partners authorization. Also, since it is a short term loan and paid back and not just stolen/taken from account.
Submitted: 9 months ago.
Category: Business Law
Expert:  J. Warren replied 9 months ago.

Hello and welcome to JustAnswer. My name is ***** ***** I am an attorney who will try my very best to help with your situation or get you to someone who can. 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.

Borrowing from an LLP is no illegal but should at minimum be documented by a promissory note and should comply with any provisions of an LLP agreement. To minimize risk of upsetting partners or being accused of embezzling it would be best to seek approval even if under the amount permitted by agreement.

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Customer: replied 9 months ago.
I made a purchase for a vehicle for $6200, which I use to drive to and from work. I paid the amount back within 60 days. I did not seek any type of approval from my partners first as I am the primary account holder and paid the loan back. At this point since I did not get approval first, what should I do to document this transaction?
Expert:  J. Warren replied 9 months ago.

If an amount is borrowed and paid back without a formal written document, the transaction can be documented by memorandum. The agreement whether written or otherwise is already satisfied and therefore can not be post documented by can be documented as satisfied if desired so there is proof it was paid back. This is not necessary however, can be used to document what occurred.

In the future if borrowing occurs it should be documented by a promissory note and agreed to by all parties.

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