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my daughter was asked to start up a travel agency with someone…

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Answer 1

Lawyer: D.A.M., Lawyer replied 9 years ago

Hello,

Your daughter -- who it sounds like is the one who's contractually involved here -- "might" have standing to demand expense reports but it really does come down to the kind of arrangement they have.

For example, if she bought in (and the funds were her capital contribution) but only received something akin to non-voting shares then she might not actually have a say in what goes on. There would be some protocols on how she could demand production of these records and perhaps even start a shareholder action against the Directors of the company for misuse of funds but whether that's the best way to approach it I really couldn't say. It really all comes down to the legal details of the contract and what youre daughter's standing is to make these demands and her rights to the funds she's put in.

Unfortunately there is almost an infinate array of possibilities here on these facts, you really need to have someone go through the agreements and figure out precisely what she signed up for. Unfortunately at this point you don't even know what rights you have to ask for any sort of production (and, then, what you can do if it does turn out to be false) -- those agreements will form the basis of the legal relationship and then the law fills in the obligations of the parties amongst each other and to the company.

Its possible (and I dare say likely) that she'll be able to demand production of the records and, if they're not accurate, take some sort of corrective action but on these facts its just too hard to tell what sort of action she should be taking. You'll need that local lawyer to go through all of this and plan out your next steps.

Regards XXXXX XXXXX wishes.

Answer 2

Lawyer: D.A.M., Lawyer replied 9 years ago

Hello,

Of course she can demand it. If she's listed as a partner, he really can't push her out (and she shouldn't sell) without getting her investment out. If he wants to buy her out, then her investment sets a reasonable number as a price.

Again, you're going to need to get a local lawyer involved here to dig through what this deal looked like from a legal sense -- that means going through the legal documents in detail (as well as demanding production of proof of the other partner's investment and may also require getting estimates from other third-party contractors to set the true value of the work provided) so see where your daughter stands.

Answer 3

Lawyer: D.A.M., Lawyer replied 9 years ago

Hello,

There are possibly avenues to persue such as shareholder actions and the like but the cost for going down that route may well outweigh the benefits.

It all depends on the precise nature of the Operating Agreement that sets out the terms of the business relationship and the obligations between the shareholders and, of course, what your daughter can provide with respect to what the other shareholder did, or did not, contribute based on those obligations.

There MAY be something there but, then again, there may not be. If it was simply a matter of a bad business deal there may not be much the courts can do about it. However, if she had rights that were violated in some fashion then there would be recorvery. As I mentioned before, the only way to know exactly what, if any, rights she has is to have someone local go through all of these documents and transactions in detail and figure out what the claim, if any, your daughter has is and, then, come up with a plan of action.

There unfortunately, isn't just a simple answer because it all goes back to the operating agreement and what your daughter can prove in terms of conduct of the other party.

my daughter was asked to start up a travel agency with someone…

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