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socrateaser, Lawyer
Category: Legal
Satisfied Customers: 38910
Experience:  Retired (mostly)
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Partner in 50/50% small business is using business funds to

Customer Question

Partner in 50/50% small business is using business funds to pay mortgage and tuition without my knowledge.I discovered this upon viewing bank statement.
Submitted: 7 years ago.
Category: Legal
Expert:  socrateaser replied 7 years ago.

You can sue for breach of partnership, fiduciary, loyalty, dissolution and an injunction to prohibit further wasting of company assets.


You could sit down with your partner and tell him/her to stop immediately, and perhaps get an agreement that you are entitled to an equal distribution from the business. If the partner refuses to stop, then you will know that your partnership is over.


And, of course, you could simply take your equal share, which isn't what I would call a great way to be in a partnership, but there's no reason to be a patsy, either.


Hope this helps.


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Customer: replied 7 years ago.
Is the action of my partner embezzlement?
Expert:  socrateaser replied 7 years ago.

Funny you should ask. I was going to mention something about that.


Yes and no. Legally, criminal embezzlement is the wrongful taking of property rightfully entrusted by another. So, yes, it's embezzlement. It's also "conversion," which is the civil law equivalent.


Unfortunately, getting the District Attorney to prosecute a partner for taking money out of a small partnership is about as easy as getting a phone call with the Pope. You certainly can report the actions of your partner to law enforcement. But, more than likely, the government will say, "It's a civil matter," and thereby force you to spend your money, rather than the taxpayer's, to get satisfaction.



Edited by socrateaser on 10/1/2009 at 2:18 AM EST

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